Install fresh hard drive.

You will need to partition the hard drive so that the macbook will recognize a brand new hard drive. While booting up from the OSX DVD when you are asked for the location where you want to install OSX go to the top menu and choose UTILITIES and open up DISK UTILITY.

If everything is ok then you should see the new HDD in disk utility. Choose the drive and go to the partition tab. To partition the drive do the following:

• under volume scheme click the drop down arrows and choose 1 partition or as many as you want. usually most people only use one partition.
• on the bottom click on the options menu and make sure it is set to GUID partition table.
• in the NAME field enter the name you want the drive to appear as like your name or macbook or whatever you choose.
• under FORMAT make sure to choose Mac OS Extended (journaled).
• Size should already be set to the maximum capacity for the drive but double check it to make sure.
• Click apply and you are done.

Now close Disk Utility and when you are back at the destination select menu you should see you HDD ready to be loaded with a fresh install of OSX.

I hope this helps, good luck!!