There are more people with this problem. Seems to be a problem with western digital drives. The leopard installer CD will see the drive if you open System Profiler, it will just not install to it (the installer itself is at blame).
Because initially you had the old system transfered to the new disk using 3rd party utilities, you have not seen the problem. An already installed system was copied over. Now, because you want to re-install, you stepped on the problem.
Maybe you should try to exchange this drive for another brand, or again install in another machine/HD and copy it over.