What OS are you running?
Which hard drive already has the OS on it? The 70GB? (Meaning you are installing the 500gb disk)
Is it a SATA or IDE drive?
If you are running windows 7 (pretty sure its the same with XP and Vista):
Click the Start Menu, then
right click on My Computer and select "Manage"
Open the Storage menu (Left Panel) then select "Device Management"
Wait for it to detect your drives, then you should be presented with a screen something like this:
Right Click on the desired drive and select "Format". I recommend you use NTFS,
not FAT32