Problem replacing hard drive

I wrote a couple days ago that the hard drive crashed on my macbookpro, so went out today and picked up a new one. It's this drive:
Newegg.ca - Western Digital Scorpio Blue WD10TPVT 1TB 5200 RPM 8MB Cache 2.5" SATA 3.0Gb/s Internal Hard Drive -Bare Drive

I put in the new drive and booted my mac using the install CD that came with my computer, but I am having difficulty formatting the drive. When I go to create a single 1.0 TB partition, it gives me this error:

"POSIX reports: The operation couldn't be completed. Cannot allocate memory".

I have tried both erasing the drive AND trying to make a single partitian to be able to re-install OSx. For erasing or partitioning it gets past the "unmounting hard drive" stage. It seems like the hard drive won't unmount for it to be reformatted.

After it gives one error, the disc utility says
"S.M.A.R.T status: not supported"

Am I doing something wrong?

It's a mid-2010 13-inch MacBookPro, and I am trying to install the same version of OSX that came with my computer (I am pretty sure its Leopard)

Ok, when I boot up my mac from a version of OSX I installed on an external drive, it tells me that the hard drive is not readable by this computer.

Does this mean that I can't use a hard drive this big?

Sounds like the drive might be DOA (dead on arrival).

Boot from your external drive.
Run Disk Utility
Try to partition the new drive.

If that doesn't work, return drive to vendor and get a new one.

Thanks for your answer. I ended up taking it back in the end (twice, actually). The first time the person at Future Shop put the drive into their laptop and formatted it and it worked fine for them, but when I brought it home the 1 TB drive had a 125 GB partition with 0 bytes free that would not mount and was formatted MS-DOS FAT... even though I saw him format it properly. The drive had also labelled itself "media" even though he never gave it a name

Truly bizarre. I ended up just ordering the same model as my old hard drive since I know it works in my computer