Unfortunately the PS3 does not recognise that a drive is inserted after installing it and asks for media to be inserted containing the operating system.
The new drive has been formatted to Fat 32 as required.
The frustrating thing is I can hook the new drive up to the PS3 using an external case and it works fine, I have even backed up the PS3 to it but once I try to install it inside the machine it won't work.
The only visible difference I can see between the PS3 original 40gb and my new 320gb is the new drive has 4 pins at the side of the sata plug wheras the old one only has 1. I am wondering if I need to use a jumper to set it as a master or something??
The drive didn't come with any jumpers though and there are no instructions for doing so printed on the label side of the drive as usual.
I have also tried downloading a copy of the operating system and copied it to a usb flash drive to try and get the system up and running that way but when it searches for an operating system on "other media" it doesn't find anything.