Hi, I'm having the exact same problem you are having with a western digital drive. I got the 640gb green drive.
Anyway, when I hook it up to my computer, windows (vista) sees it, I can activate it, but when I go to format it, it says "Format failed to complete"
So I run the diagnostic tool and it says Test cable error.
I tried two different cables, two different sata ports. I tried putting it in raid and normal, put the jumper on each different setting and nothing worked. It's weird that it won't work, because the computer can see it, it just won't format.
So anyway if anyone figures out what is wrong I would be really glad to know what to do, otherwise I'm gonna have to rma it. Thanks