Have you formatted the drive? Is this a brand-new drive, or a drive you've already used with the Mac?
Is it possible that the drive is formatted in a Windows-style format, like NTFS or FAT32?
If you need to format the drive to prepare it for Mac OS X, select "Disk Utility" from the "Utilities" menu in the Mac OS X installer, and you can format the disk from there. Be aware that formatting a disk removes all data from the disk permanently.