Thanks for the detailed instructions.   Tried it all but didn't work.   Then I read about someone trying to install the same hard drive on an Inspiron 1545 and having to adjust the hard drive to align with the connectors using paper and another person was using foil which made me realize it was a "fit" or "size" issue. I then decided to open the laptop and manually adjust the new drive into place and all is working now.(Dell 1525 has a side load drive holder so had to open it up to make this adjustment properly).  The drive on the 1525 is 9.5mm thick but the new drive is 7mm..even though the sales page for this drive said it would fit a 9.5mm slot. All is good now.  
Inspiron 1525  (6/2008) hard drive failed.    Purchased a Western Digital 500G (WD Blue) SATA III 5400 RPM replacement hard drive.   (NOTE: this is the 2nd hard drive replacement since I purchased the 1525..the first time I replaced the hard drive, everything worked as it should. Original hard drive was a Seagate).   Installed replacement Hard Drive is installed it will not load the Vista OS system from the operating system disc (that came with the laptop) because it  won't recognize the driver for the hard drive. Tried downloading the most current drivers from the Dell site but that hasn't worked either.   As I said, the previous hard drive replacement (another western digital) worked just fine when I reinstalled the Vista OS in 2010.   Any ideas?    Thanks....  
Inspiron 1525 / Windows Vista Hard drive replaced but won't load drivers