Ok I just got a new HD because my old hds little SATA plug holder broke off and it takes forever to get it in place, when it wasn't in the right place it would give the error, but when I got it perfect it would boot up windows, I tried to tape it in place, it went out. Tried fixing it for hours. Now I have a WD 500GB Caviar, plugged it in all good, bios is recognizing, but I still get the error after trying to boot slax or a win7 install disk.
Like I said, nothing will install or work until the HD is formatted. Is this disk you're using a bootable disk?
If you are using a proper bootable disk to install the OS, it should boot from the disk and then allow you to format etc. There is no reason your computer should give the Disk Boot failure error if you have a bootable disk, and are in fact booting from it. In fact, it should NOT even get to checking for a HD.
As a work around, you can just install that HD into a working computer and format it that way.