Many controllers, especially those from VIA (my Abit KV7 and ASUS boards for example, which have the VIA VT6420 chip) won't recognise newer SATAII drives immediately on connection.
This is expected and mandated behaviour so all isn't lost and your drive isn't DOA. It just needs an extra jumper to put it in 1.5G SATA I mode. This is usually alongside the power connector on the back of the drive itself.
For Western Digital drives, go to their Support FAQ
For Seagate / Maxtor drives, the process is outlined in their Seagate SATA II Support response