what file system is the hard drive formatted as? If it's HFS Standard or FAT/32 it's not going to install. Also, if the drive was pre-formatted on a PC or a intel mac, it may be either MBR or GPT partition, in that case just format under OS X and you should be fine.

OS X 10.3 won't install on a disk that isn't formatted HFS+ (Either Journaled, or not journaled) and APM (Apple's Partition scheme)

You might need to get your data off and format it under OS X. your disc should show up then.