i dont know, there could be many things. i actually bought a faulty drive once, it was an IBM Deskstar. i replaced it with a maxtor and everything works super since then.
but going back to your problem.
1. check and double check the jumpers on the hard drive itself. make sure you have it set to secondary IDE if thats what you are using it at. as for specific instructions on how to do that, your bets bet is to visit the drives manufacturer support section and do some research.
2. some hard drives actually need drivers, although the ones that came with your O/S should be ok, check the driver(s).
3. backup all data you dont want lost on the drive and test it. run a lot of things on it and see what happens, if you still get same results, also, liek someone above suggested, put it in another computer (friends, your old one, whatever) and see if you get the same problem again. you can also disconnect your primary drive, and plug this one in its place, if its not bootable, then boot of off the O/S installation CD, or floppy or whatever else.
4. make sure you dont have a hardware conflict. for example, if you are runing Win XP NTFS on primary position on same cable, then note the speed that the drive controller/drive is set to. your old drive might be unable to function at those higher speeds and may cause a problem in the longrun to your board and even primary drive. i know that theoretically they are all supposed to be compatible, but guess what, they arent. so if your 2nd drive is designed to run at different speed or cant support your file system (for example NTFS), then at least put it on seperate cable, and go into bios and change the settings accordingly. also some older drives arent designed to run with the cables you are using today. check if it needs and original regular plain old IDE cable instead of whatever you got. i forgot how many pins they had, something liek 60ish or 80ish i think, its been a while for me.
5. cables and plugs. make sure the plugs are all clean and you are geting apropriate voltage to teh drive, i suggest cleaning them up with air (give it a blow

) or electrical contact cleaner then let it dry up. if you use cleaner make sure it is totally and completely dry before you turn the power back up, otherwise you may fry your whole machine. if you have a different, newer cable, use it, see if it makes a difference.
6. you may have a bad sector or 2. since i have a feeling you'll be only using it as a storage device, i strongly suggest that after you check the setup (jumpers, cable position, speed, drive specs, etc.) you move everything from it and do a full chkdsk/scandisk (whichever is applicable for you) and map out bad sectors. again type chkdsk /? or scandisk /? at the console for command instructions and check the MS documetation. this is really important, if your drive has a damaged sector thats not visible, it will always from now on halt or have serious errors whenever it needs to read/write on that sector. if its mapped out and marked, it will skip it and move the data accordingly. one thing i should note, when you do the sector scanning, it takes a REALLY long time, several hours in fact. my 180 Gig HD took about 8 hours and i have a damn fast comp, 60 gig takes around 3-4 hours. so you can just leave it up and runing while doing something else.
there is an alternate way to troubleshoot if you have a bad sector or so. that is to run defrag with full animation on the drive and watch it. it should stop/halt or freeze the drive or even system everytime that it hits the bad spot, same physical location on teh drive in question. i should also add that norton does a much better job at both defrag and scandisk type of utilities then MS ones that came with the o/s.
after that point repeat step 3, run a lot of stuff on it and test it.
7. AFTER you do all that and eliminate any electronic/mechanical defects, reformat it. yup, empty it, reformat it, preferribly to the same format that your primary is using (FAT 32 or NTFS most likely 2 choices).
i think that about covers the drive
8. if you do all that, and the drive still does same thing, then that drive is botched and needs to be replaced. thats how i test them more or less and i have found my share of problems using those methods. your milage may vary