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Hi Alan_CAL, noted on the current issue that you're facing with the Windows installing. With the given model of the desktop, I believe you're running Microsoft Windows XP Professional SP3 previously on your machine. Therefore, I would like to list down some action plan for your situation which might help to solve the error you're facing at the moment. Firstly, check the compatibility of the mobo (motherboard) by plugging in another HDD and see if its being detected. If the HDD is also not detected, probably you should check the mobo condition and the SATA port which you are tied on currently. If the HDD is detected, then probably you should check on the SATA cable which the newly bought Western Digital 250GB Caviar Blue attached to. You may want to unplug and re-plug in the SATA and power cables again before trying. Then, check if the hard drive is formatted using the file system which the Operating System recognizes. Kindly visit below link for hard drive failure troubleshooting:
If even after checking all the possibilities, the error still popped out, then it might be the hardware issue whereby I advice you to check the physical condition of the hard drive and try swapping the hard drive to identify the cause of the issue. Hence, if you found the defect is on your Western Digital hard drive and if it is still under warranty, kindly visit the below link to find out on the RMA (Return Merchandise Authorization) process:
Hope the above advice help to solve your issue.