The hard drive on the XT is housed in the battery bay.
1. flip laptop over and unplug from AC power
2. remove battery
3. remove 2 screws securing the hard drive retention bracket
4. gently tug on the hard drive cable to disconnect
5. remove hard drive.
6. transfer cable to new drive
7. reverse steps 5-1
Just remember, the XT takes a hard drive in 1.8" form factor. Also, there might be a little plastic holder around the hard drive as well and you'll need to move it. I've only worked on one XT and it was a motherboard swap so I didn't really pay much attention to the hard drive once I removed it.