Hard drive problems mid 2007 macbook

So i got a file folder with a question mark on my screen. everything i read pointed toward bad hard drive. so i buy a new hard drive, remove old hard drive insert new hard drive get nothing, tried installing os onto the new hard drive nothing. just to see what would happen i plug the old hard drive into the usb port, viola it works. could the place the hard driuve connects to in my lap top be bad? what is that thing called , and how hard to fix it?

i'm a computer maintenance novice any help would be awesome.

Regarding the new hard drive that was installed...did you first format the hard drive "Mac OS Extended (Journaled)"?

- Nick

I did not format the drive. I did leave out that I put the old hard drive back inside the laptop in an effort to copy it to the new drive and again I got the folder with the question mark. I took it back out and it works fine through the USB port.