XBOX is sensitive to HD brand.

[Punky]

Now picture this.
Sitting in front of the xbox with 2 HDs.
Put one HD in. Put in a backup of say Ghost Recon 2.
Turn the Xbox off then on. Viola - you're playing no problem. You see the "Press Start" message on the title screen and so forth.

Now replace the HD with a FRESHLY made one. Put the SAME disc in and reboot the xbox.
No go. After some momentary stuttering (like a fraction of a second) the opening video starts but you can't stop it and you can't start a new game.
Pushing the controller buttons do nothing. Unplug the controller and plug it back in. Aha - now Xbox is giving some audio feedback to the button pushing (different sound for each button), but alas - nothing else changes.

Put the other HD back in. It all runs fine.
For fun backup the appropriate folder from E: Put the other drive back in and transfer it over. Nope. Still no go. Nothing.

Now go try a dozen other games. About half will experience the same sympoms as Ghost Recon 2. Fable being another one for example. It makes no different if it's on the HD or running from DVD (with F empty). Same symptoms.

See what I'm talking about?
It's got nothing to do with X: Y: Z:, cuz the HD that doesn't work is fresh.
It's got nothing to do with the game, since many games do the same thing.
It's got nothing to do with running games from the HD, since we're talking about running from the disc.
It's got nothing to do with the transfer method (ftp) since the same disc will work when one HD is plugged in, but won't when the other HD is plugged in.

Oh. And did I mention.... I saw the exact same thing on the New HD when the C drive was IDENTICAL to the original in terms of files and so forth. When I thought I screwed something up, that's when I tried preparing the drive from scratch but soon realized that didn't make a difference.

I'm a pretty technical guy (I'm a lead programmer by profession), everything is pointing to something taking a look at the HD. Maybe the drive needs to have the capability of being locked (which perhaps the new IBM drive in question here does not) - even if you're not going on line or anything like that.