As you suggested i do:
I have already tried to set the 160gb IDE drive to slave mode (i assume this would be the normal setting for an externa HDD). As what the illustration shows, setting the IDE HDD to slave mode setting requires to have no jumpers on the connector pins. Tried it this way and it doesn't work.
Tried it with the jumpers on the connector pins set to master settings and whaddayaknow, 
IT BLOODY WORKED! YES!!! 
 
 
@ dexterdal - 
THANKS MATE, YOU REALLY ARE A GREAT HELP!
THANKS FOR YOUR PATIENCE IN ASSISTING ME WITH MY PROBLEM AND FINALLY SOLVING IT IN THE END.
++100 TO YOU... 

 CheerS!!! 
PROBLEM SOLVED. THANKS TO DEXTERDAL..