Well as even the BIOS is not seeing the HDD I would first start looking at the connector to the Drive. If it one that bolts into a caddy and then slots in it may not be plugging in correctly or if it is of the type where you have to plug on the lead you may have plugged it in wrong with one set of pins not connected or something else like that.
As far as the drive size goes a 12 GIG drive should be seen even if all of it isn't available but I would try a BIOS update if there is one available if the drive is plugging in correctly.
There are several things that could be happening here but as the old drive was doing exactly the same thing the most likely answer is that it isn't the drive but the connector or controller which is at fault. Pull the battery out and look very carefully to see if it has leaked at all if it has you'll need to pull the thing apart to see just how much damage has been done and if it is repairable.
The other thing to look at is with both drives removed is the power requirements of the old Drive compared to the new drive if the new one is vastly different that could be your problem as the drive isn't being powered up and running. I suppose if it was a second hand HDD that you bought it could always be faulty as well. There is an adapter available to plug these drives into a standard IDE interface so it just might be worthwhile buying one and actually testing both HDD to see if they are actually working if they are you'll have to start looking elsewhere and if they aren't the replacement drive that you have brought is faulty as well.
Col