Bought a 500gb hard disk only registers as 128Gb when in computer. how do I recover and format this oem drive?

recover your data with the help of one good data recovery software and then low level format of your hard disk drive.

Go to your Admin Tools, computer management, disk management and if it shows up there but with a black line across the mini window it showing in, it will need to be enabled for windows to see it. if nothing like that is working, it may just be a bad drive. kingston 128Gb flash drives may not be formatted correctly for windows to see that its plugged in

for more Do not format your hard drive. We will evaluate your drive, and if the problem is only a logical recovery issue, we will recover your data for $150 per 250GB disk capacity. You would need to provide media for us to recover to, and we would send the recovered data back to you. If the problem requires physical recovery, we could get you a quote for the deeper level recovery service. Come see us at http://htcilabs.com/services/data-recovery-services/ for more information.

The hard disk could be faulty.
Try formatting the external hard drive again.
If this does not work then most likely the hard drive is faulty and needs to be replaced.
NOTE you will not be able to recover your data when you format the hard drive.

People often feel panic when I see this. If I format the drive, will I lose all my data? If not, how could I get access to my files?

My take is that you may have to format the drive (use quick format) and then use recovery software to recover your files.

Here's some information about file recovery, think you need to take a look, very useful
http://www.facebook.com/pages/Asoftech-Data-Recovery/290956907592436?sk=info

The disk-drive inside the enclosure is "dying".
If the warranty still is valid, exercise the warranty to get it replaced, at minimal cost to you.
If the warranty has expired, open the enclosure, remove the disk-drive, and take the disk-drive to a computer-store. Buy a new, compatible, drive, and then "transplant" it into the enclosure, to "revive" your external file-storage appliance.

The "worst" that could happen would be that the motherboard would either:

* not recognize/support the "large" disk-drive at all,

* would only be able to access "part" of the disk-space, e.g., the first 128GB or 256GB or 512GB of disk-space.

However, those possibilities only occurred with "older" motherboards.

Given the specifications for your computer: http://cdgenp01.csd.toshiba.com/content/product/pdf_files/detailed_specs/satellite_P205-S6267.pdf

and the fact that Microsoft Vista is pre-installed, you must have a "recent" motherboard, and it will support any serial-ATA disk-drive (500GB, 1TB, 2TB, ... ) that you can afford to purchase.

Get hold of the Acronis Disk Director , that will wipe it back to basics for you

Paul: Usually the drives come with a disk/cd from WD. Did you use this to format the drive?

check your bios if the disk is recognized as 500gb first. if it is not recognized, update your motherboard bios. most updates are available in their manufacturers site.