To be sure of your setup, I'll ask a couple of things that you'll probably think are stupid questions but please don't be offended.
Firstly, so you used a 'Y splitter' to power to both harddrives?
Secondly, I know you mentioned you tried different master/slave settings etc, but the new drive connected to where the DVD-ROM would normally go should be set to slave and the original drive to master (as opsed to cable select which it is originally on). You set both drives accordingly?
Thirdly, how far d through the upgrade process does the wizard get before the message, do you get to the point where is detects your drive is big enough to support both an F and G drive and asks whether to create F only or F plus G?
Finally, what is the error message that the upgrade wizard gives?
The HDD upgrade wizard is a great, easy tool and I'd persevere trying to sort it out. But if in the end you just cant get it to work for you, you can format the drive using Auto installer Deluxe 3.0. A torrent file can be found at the usual places.