From what you describe above you have never booted from the hdd, it has been constantly booting from the cd as this would appear to confirm.
Quote:
if I take the cd out it says
DISK BOOT FAILURE, INSERT SYSTEM DISK AND PRESS ENTER.
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It could be the cable, can you try a different one? (I have had faulty brand new cables before) but the fact you say it formats the drive would argue against that, though your working drive you tried fails to boot as well would argue for that. Try a different cable if you can.
More thoughts, if it is a IDE hdd, is it on the same cable as the rom drive? is it set to master? or do you have both drives as cable select on the same ide cable? if you do, the hdd might be positioned incorrectly on the cable, e.g. when using cable select as a jumper setting the os drive needs to be on the end of the cable. This would also cause your working drive not to boot.
I presume you have checked that the hdd spins up at boot to ensure it is actually getting power? once again though the fact you state it formats would confirm it does.
That would be the first two things I'd look at.
EDIT: When you look in the bios is the drive recognised? What drives are they btw? ATA or SATA? Worst case scenario is a dead IDE/SATA slot, try using a different one.
Also can you give us your hardware spec's please.