Alright I just recently bought a new arcade version 360 since I already have a 20 GB HDD from an older xbox that died. I know Ive formatted it in windows and then reused it in the xbox after, but this time around I cannot get the 360 to recognize and format the drive. Initially when I plugged it in I got E68 then I formatted and got no error and no sign of it being recognized. Ive tried FAT32 and deleting it so its unallocated but nothing is working. Any thoughts?

Your missing the security sector. the xbox360 will never use it again without it.

So I zero'd the drive and wrote the hddss.bin to it in winhex then did the MHDD thing to it but still was not recognized. When I run NHPA it works the first time around without telling me I need to power the drive off so I am thinking that its an incompatibility with my chipset. Ive read that the VIA card doesnt work either. I guess I am screwed with my current configuration unless someone says otherwise? Thanks anyways.

are you sure the security sector was written to the right spot on the drive? sectors 16-22? If so open in your hex editor and check that the serial number from it mtches the drive. also you can use hddhacker to write the security sector back to the drive and if the sector matches the drives firmware it will give you the "Your drive will work in your 360" message. HDD hacker will error out if the security sector does not match the drive because it only rewrites WD BEVs drives to match the hddss.bin. Good Luck.