Help! Can't get to restore on a new drive

I used Time Machine to make a complete backup of my MacBook on an external hard drive and everything went very smoothly. I only had about 32GB of used space when I did the backup. I then removed the 120GB hard drive and installed a 320GB drive as the DIY manual said to and it was very easy to get it swapped out.
I then turned on my computer with the Install DVD and used the Utilities menu to restore my system from a backup. It recognized my external drive I had put my backup on, recognized my backup just fine from earlier today, and then I went to the next screen and it calculated the amount of space it would need. Once it finished with that, it sat at the screen trying to search for the drive to restore to and didn't do anything. Could I have not pressed the drive in all the way? The bracket went on just fine and I didn't have any problems with it. I suppose it could be a bad drive but I don't think it is. Does it just take a really long time to recognize which drive (the internal one) to restore to?
Any ideas as to what is wrong here? I really need to get this restored and then partitioned to install Windows on it as well to get some research done on it tomorrow.

I waited for 30 minutes and then said forget it. I went through disk utility, created 1 partition and named it Macintosh HD, and now I'm waiting for it to erase with one pass of writing 0's as this was suggested in another thread for a new drive. I have another hour until that finishes and then I'll see if I can get it to restore completely and recognize the drive. If it doesn't show up after that, then I'll definitely do the normal install and then restore my data from the time machine backup.
This has been a bigger hassle than I would have liked but hopefully it will get me what I need. I'll let you know how it goes. Thanks for the help in both threads V.K.

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