You could also try the drive with a different USB cable, to see if it's properly recognized in Windows Explorer (This PC, My Computer). If that doesn't help, you could download the HDD...
You could also try the drive with a different USB cable, to see if it's properly recognized in Windows Explorer (This PC, My Computer). If that doesn't help, you could download the HDD manufacturer's diagnostic tool and run the tests to see what's the situation with the HDD.
To answer you question, a 1TB external drive should work fine with both Windows XP and Windows 8.1 as long as there are no issues (e.g. faulty cables, driver problems, faulty HDD, faulty USB port, etc).
Hope that helps. Please let me know how everything goes.
Boogieman_WD