Your question states that the drive was non-formatted. Did you ever reformat it as HFS (Mac format?) If you simply booted and attempted to run the installer, if the drive is not in the right format it won't work.
When booted to the installer disc, goto the Utilities menu item in the menu bar, and open the Disk Utility application. From there, select the drive from the source list on the left. Under the partition tab, select 'options' to use the GUID partition scheme, and repartition the drive, using HFS as the format. Once that's done, you can close disk utility and the installer should see the drive as a valid destination volume.
As bmike stated, you'll need to make sure that you're using valid install media - the discs that ship with each machine are specific to them, so if they are indeed the original discs you should be fine, but if they're from a 'similar' model they likely won't be.