New
#11
Windows 7 installer is on a DVD, not CD. Set accordingly: http://pcsupport.about.com/od/tipstr.../bootcddvd.htm
Make sure your IDE HD registers correctly in BIOS setup.
For the cleanest install, use Custom>Drive Options to delete all partitions, create New one(s) as you wish, then format before installing WIn7 to first partition.
Suggest you don't have old HD plugged in during install as it will establish a dual boot with SYstem MBR on old HD. You can plug it back in later to copy over files, giving it a letter in Disk Mgmt if it doesn't show up.
Clean Install Windows 7
Another option is to save a Win7 backup image of the failing HD externally, then reimage it to the new HD using booted DVD Repair console>Recover using an Image.
Backup Complete Computer - Create an Image Backup