Thankfully, there's nothing wrong with your hard drive... one of two things is going on here.
The first possibility is if you've installed this as a second hard drive. I believe that's a PATA hard drive (which connects to the hard drive with wide thin ribbons, instead of the narrower connectors used with SATA), so you'll need to check two things:
#1. Make sure the jumper in the back of the drive is set to "Slave" or "Cable Select". (There should be a little diagram on the top of the hard drive to show you where to place the jumper, or you could check the hard drive's manual for instructions.) Also check the jumper in the back of your primary hard drive, and make sure it's set to "Master".
#2. Check the IDE cable connecting your hard drive to the motherboard. You should have the connector on the far end of the cable plugged into this hard drive, and the connector towards the middle of the cable plugged into your primary hard disk. (The connector in the middle is for "Master", and the one towards the end is for "Slave".) This can make for some interesting cable acrobatics if your primary hard disk is directly above your secondary...
The second possibility is if this drive you just installed is intended to be your primary hard drive. If that's the case, the error is worded rather threateningly, but it's just telling you it can't find a bootable operating system. Make sure your Windows install CD is in the CD-ROM drive and reboot. It's a bootable CD, so it should bring you right into Setup, where you can partition and format your new hard drive... and then install Windows.
If that doesn't work, try changing the boot order in your BIOS so your CD-ROM drive comes first, before the hard drive.
