If I stick a blank hard drive into my PS3 will it work?

On Christmas Day 2010 my PS3 stopped reading discs so I bought a new one, took the hard drive out of the old one, wiped/formatted it and used it as a portable hard drive.
But today I've found a possible fix to get my old one working again.

If I wipe the hard drive and stick it back in, will it work? Or do I have to have certain files / directory structure? How do I install a new hard drive into a PlayStation 3?

Yes it will work, but you will need to download the PS3 firmware and put it on a USB stick for installation:

To transfer the update data to your PlayStation 3, save the file to a PS3 compatible storage device such as Memory Stick, Memory Stick Duo, USB drive or PSP.

Before starting, use your PC to create a folder named 'PS3' on the storage media or USB device. Within the folder, create a folder named 'UPDATE' (This folder name is case sensitive and must appear in all capital letters). Once the UPDATE folder has been created, download the PS3 system software update to this location.

It will either request this when you turn the PS3 on for the first time after putting the hard drive in, or you may need to put it into service mode for it to install by following the instructions below, and then choosing the "System Update" option:

Since the 2.5 update the PS3 has a Recovery menu with the following options:

• Restart System: Restarts the PLAYSTATION®3 System.
• Restore Default Settings: Reset all system settings back to default.
• Restore File System: Checks for corrupt/missing system files.
• Rebuild Database: Rebuilds the OS for the PLAYSTATION®3.
• Restore PS3 System: Fresh restore; Deletes everything and starts from Scratch.
• System Update: Update the PLAYSTATION®3 System

How to get access to service mode:

• Make sure the PS3 is turned off,
• Press and hold the power button on the PS3 it will power on then power off.
• When it's off press and hold the power button again until you hear two consecutive beeps.
• It will ask for the controller to be connected via the USB cable,
• Turn on the controller and you will have access to the menu.

Source: http://www.waltercedric.com/gadget/262-sony-ps3/1444-ps3-factoryservice-mode

To access the hard drive utility:

With the blank drive in the PS3, it will complain that the correct drive has not been found. Press and hold the power button. It will beep immediately and then beep two more times. Release the power button and hold it again. It will beep immediately and beep again. Release button and it should ask you to connect controller with wire. You then can format and install the PS3 system on new drive.

I formatted a 500M drive successfully with utility. PS3 system had no trouble copying and running from drive.