Hey bhunnu16,
I don't think there is any problem with the SATA to IDE converter. The problem lies in the Motherboard. Your m/b does not support/recognise SATA drives.
Just like you, I have an old Celeron processor with ASUS m/b. I got a PCI to SATA card & tried to detect my SATA HDD. It does not detect. I contacted ASUS Support & they told me that the motherboard I have will not support it directly.
P.S. I did make it work doing Hot-Swapping. But that almost ruined my HDD.(HDD was gone & now is repaired) Now I use a HDD enclosure with e-SATA & USB connectivity.
Don't try Hot-Swapping unless the M/B supports it. And there is a procedure for connecting a drive through Hot-Swapping. Make sure you understand before you do anything.
NOTE: If you don't know what is Hot-Swapping, chk this:
http://en.wikipedia.org/wiki/Hot_swapping
An option is to update your BIOS to the latest version & have a try again.
So tell me which m/b you have ? Tell ur system specs. I can have a look at the M/B specs.
Other than that, the only other option I am seeing now is to buy a HDD enclosure & use it via USB.
To your query regarding installing windows ... don't think it is possible.