Download XBOXHDM,
Copy over your C: and E: from your old XBOX to the folder in the xboxhdm folder called C and E and also copy over your EEPROM.bin file you backupped from your original XBOX to the EEPROM folder in the xboxhdm folder called "EEPROM"
make the linux.iso file, burn it to a blank disc
Unplug your PC, install the new hard drive into your PC, plug your PC back in and turn it on with the new linux.iso disc you just made.
It will open to XboxHDM, follow the options on screen. Choose option 1 "build xbox hard drive from scratch"
Do what the screen asks you. Such as "do you want to format the hard drive now [yes/no] type yes and press enter.
"do you want to build an F partition? [yes/no] type yes
Let it format the hard drive and build the partitions. Then it will copy over the C: and E: files that you transfered from your original XBOX to your PC into the C and E folders in that xboxhdm folder
After its done lock the hard drive by following the onscreen options. After you successfully lock it. Take it out of the PC, hook it up to your xbox, turn it on. Voila it now loads in and works.
This is EXACTLY the steps i did, and i am a total newb to upgrading hard drives (i just did my first upgrade 3 days ago to a 250GB and this is exactly what i did step by step)
It should not be as hard as you are making i tout to be.