Well I fixed my own problem. The previous owner was a tinkerer like us, and had fitted an HD ribbon cable which worked with a 120GB HD, but not with a larger drive. It may be faulty, or from another model. When I fitted a different cable 'borrowed' from another PB the new 320GB drive was seen as expected.
I suspect the HDD is faulty and the machine cannot find a valid operating system folder. Firstly, check there is no disc in the DVD drive by attempting to start up while holding down the trackpad (mouse) button, this should eject any disc in the drive. Assuming no disc emerges, try booting from a 10.4 Tiger OS system disc, insert the OS disc and try to boot(start) while holding down the 'c' key, this asks the machine to boot from the DVD drive. If you are in luck it will start up. If not, take it to a competent repairer for an estimate...it probably needs a new HDD.
Hi Balta, I'd be tempted to try a small cutting disc in a high speed model drill like a Dremel and cut a new slot across the screw head. Don't cut too deep, just enough to give a screwdriver purchase. Then try a quality slot screwdriver to release the screw. If that doesn't work drill out the head of the screw with a drillbit the same size as the screw head countersink head. Once the cover is off you can work the rest of the screw out with needle-nose pliers I guess you have done it by now, but I post this for others in a similar predicament. Good luck, Cameron