ok take the hard drive out and hit really really hard with a sledge hammer, then put it back in and see if it still spins * :P It will make you feel sooo much better.
*I AM JOKING DO NOT DO THAT!*
I wonder if you have a bad harddrive. Does the bios detect it correctly?
If so I would suggest you remove any other devices from that connector if there are and make sure this drive is plugged into one end and the other is right into the mother board.
Next I would use setup to delete all the partitions on the drive and then create a partition format it ntfs and try again. Don't go over (what is the old dos limit 8gb?) for the OS drive. If it works then you can try increasing it later with partition magic or something.
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