Since it doesn't boot at all with that new HD plugged in, I'm fairly positive that you've set the jumpers wrong. Or, you're using an old IDE cable. I've had trouble pluggin more than one HD to the same cable when using the old ones. If all the connectors in the cable are black (That's how you recognize the old 40-wire cables), you probably need to get a new 80-wire cable. If the cable is a 80-wire one (All the connectors are differently colored), check the jumpers. For both drives, choose the Cable Select option. Plug the old HD in the connector at the end of the cable (If you've set the jumpers correctly, the drive will automatically be set as master) and the new one in to the middle connector (will be automatically set as slave).
If this doesn't help you out, post your results here, I'll try to figure out something else.