I have a Beige G3 tower with an Acard 6280M and two 120GB Seagate drives and one 160 GB Seagate drive attached to the 6280M. I did not have trouble initializing any of the drives. I can't remember whether I did the bulk of the initialization in OSX (I have Jaguar on the machine) or OS 9.1.
Could you be using an older version of Drive Setup which is trying to do a SCSI format on the ATA drives? You only want to initialize them, not format them. I don't really understand the difference, but I remember back in the day of switching from SCSI to IDE, one had to be careful not to perform a SCSI format on ATA drives attached to our machines through a third party card.
See if you can get a copy of Disk Utility from OS 9.2.2 or some such on there and try using that.
Could you be using an older version of Drive Setup which is trying to do a SCSI format on the ATA drives? You only want to initialize them, not format them. I don't really understand the difference, but I remember back in the day of switching from SCSI to IDE, one had to be careful not to perform a SCSI format on ATA drives attached to our machines through a third party card.
See if you can get a copy of Disk Utility from OS 9.2.2 or some such on there and try using that.