To do a clean install, either boot the Windows NT install CD-Rom or setup
disks. When you get to the point, delete the existing NTFS and or other
partitions found. After you delete the partition(s) abort  the install, then
again restart the pc booting the CD-Rom or setup disks to avoid unexpected
drive letter assignments with your new install.

Depending on your drive's geometry Windows NT supports a system partition
(the first primary active partition and where the files required to start
the OS reside (boot sector)) limited to 7.8gB NTFS or 4gB Fat16, while the
boot partition (where the OS is installed) is not limited in size. You wont
be able to create a system partition greater than 4gB with Windows NT Setup;
if you need a system partition 4gB - 7.8 gB, you'll need to use Partition
Magic or use another NT machine to create the first primary active
partition. The system and boot partition can be the same partition.

If you created one large system/ boot partition > 7.8 gB and installed the
OS, it may work, but the problem is if you defragment the drive or service
pack the install and the files ntdetect.com, ntldr, boot.ini, and
ntbootdd.sys end up being relocated to a point beyond the 7.8 gB barrier,
then the bootstrap process wont be able to find them and the OS wont start.

Once the OS is installed you can use Disk Administrator to partition and
format the rest of your drive. You'll need atapi.sys from SP4 or later for
Windows NT to be able to recognize a drive larger than ~ 8 gB. See the first
article for the link and instructions.

Installing Windows NT on a Large IDE Hard Disk
http://support.microsoft.com/default.aspx?scid=KB;en-us;q197667

ftp://ftp.microsoft.com/bussys/winnt/winnt-unsup-ed/fixes/nt40/atapi/atapi.exe
(this may not be available so you can extract atapi.sys from a service pack
4 (or later) download)

Windows NT 4.0 Supports Maximum of 7.8-GB System Partition
http://support.microsoft.com/default.aspx?scid=KB;en-us;q224526

Boot Partition Created During Setup Limited to 4 Gigabytes
http://support.microsoft.com/default.aspx?scid=KB;en-us;q119497

Windows NT Partitioning Rules During Setup
http://support.microsoft.com/default.aspx?scid=KB;en-us;q138364

For this problem:

"Setup is unable to locate the hard drive partition prepared by the MS-DOS
portion of setup.  When you run the MS-DOS Windows NT Setup Program, you
must specify a temporary drive that is supported by WINNT. See your system
guide for more info."

On install disk #2 delete the file named winnt.sif and start the install
again. Winnt.sif may instruct Windows NT Setup to look for installation
files in a temporary directory on the hard disk instead of a CD-ROM, if the
file doesn't exist, setup will look for the files on the cd-rom.