very serious issue!

Is the cd-rom set as first boot device in the bios?
If you boot from cd you should be able to reformat the drive again as before, hopefully without power problems, and install windoes.
The "please insert windows..." message sounds like it is trying to boot off the hard drive.

Go ahead and try the 10 gig drive. leave your old drive unplugged untill haver you have windows installed.

Can you boot to the cd-rom?
If yes then format the drive under the windows setup. Delete all partitions on the drive and make a 20 gig partition if your using the 400 gig drive. Use all the drive on the 10 gig drive.
If no then something is really messed up with your computer. Try unplugging all the drives and try booting to the cd-rom again.
If it works, then double check the jumper on the drive, if its an ide drive make sure its set as master and on the end connection on the ide cable.
Nothing on the drive, other than a bad drive, should keep you from formatting it. Format it NTFS. You can use Fat 32 but windows runs better with NTFS.

So get one or borrow one. Ebay and/or craiglist are good sources for cheap used copies.