I would go about it like this:
1.) Put the new HD in the chipped Xbox.
2.) Boot the Xbox with a Slayer's disc in the drive.
3.) Format the partitions, and install the necessary files (like xboxdash.xbe, etc...). I think there is an option that lets you do this automatically. It's Rebuild HD or something like that.
4.) Put a gamesave exploit like Krayzie's UXE installer on the HD via FTP, and rent the game needed to install it if you don't own it already. It needs to be an original copy.
5.) Obtain the EEPROM from the softmodded Xbox, and get the HD password from it.
6.) Lock the new HD with that password.
7.) Put the new HD in the softmodded Xbox, turn on the Xbox, and it should boot to the MS dash.
8.) Load the game, load the gamesave, and follow the instructions, and you should have a softmodded Xbox with an upgraded HD!