MacBook 13" hard drive replacement, partition issues

I just replaced the hard drive in my friends macbook 13 from 2006. I replaced the original 60gb with a Western Digital 500gb. Installation was cake but when I am trying to install the software I am encountering some issues. First is that it says it is a 3.4TB drive, which is 7x larger than the hard drive. I tried to create a partition but it says "input/output error". Anyone know what is going on and how to partition this macbook properly? Any input is greatly appreciated.

With the input/output error, I'd be opening the case back up, unplug and plug the cable back in to make sure the connections are tight while also checking there are no bent pins.

Thanks I will give that a shot. Is there any reason that the hard drive would be showing up as 3.4 TB rather than 500GB?

Just went ahead and removed the hard drive and the pins look fine, I put it back in and made sure it was actually in and I am still getting the same input/output error

The new hard drive is a 500gb western digital scorpio black. WD5000BPKT. From the reviews I read there were a couple of people that used these in their macbooks without issues so I am assuming the hard drive will work with the mac. Bad drive maybe?

Bad drive maybe?

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Either that or a bad SATA ribbon cable from the drive connector to the logic board. I always recommend changing it out along with the drive especially on an older MacBook or MacBook Pro.