The PB150 is an oddball in several respects. The HD driver resides in ROM, for one thing, and the presence of another driver on the HD will generally prevent booting.

Internal HD Format version 1.0 should do the right thing (I don't believe any version of Drive Setup works correctly for this purpose). You can get a PB150 boot disk with the right utility from the download link found here: http://charm.cs.uiuc.edu/users/olawlor/mac/mac_PB_150.html

Hope that helps.