I installed a new HD in an Amiga just yesterday so it's quite fresh in my mind (however, this was with Workbench v. 3, but I imagine it is quite similar). If you have the 2.x install disk this is what I recommend you do...
a) Boot from the install disk. You probably won't see the drive icons at this stage for your new HD
b) Load up HDToolbox. You might have to dig for this program amongst other things like the Workbench installer, but it should be there.
c) It will probably display some information about a drive it has recognised on your system, but more likely than not the only thing it will let you do at this stage is Change Drive Type.
d) Click on this. You will now be presented with new options, you want the one which says Read Information from Disk or similar. This will quickly scan the disk and extract all the information HDToolbox needs to go on with partitioning and preparing the drive.
e) Great. You've done that. Click on OK or Save to take you back to the main menu.
f) Next partioning. If you don't want to bother with this step HDToolbox by default will give you two equally sized partitions (although on smaller disks it will just give you one). If you want to change this click on Partition Drive and use the sliders to alter the partition sizes. It's very easy. Just press Help if you get confused. And don't forget to name each partition something sensible like DH0, DH1 etc.
g) Once you've done that click Save Changes to Drive and close the program.
h) Wait ten seconds and then reset. When workbench reboots your partitions will be there, but they will be described as DH0:NDOS or DH1:e509 or similar gobbledegook. Just format them as per floppy disks (i.e click once, select Format from the pulldown menu).
i) Oh, and one other thing, if you want to boot from the HD which I expect you do then make sure you click bootable for one of the devices.
j) Now you can set about installing Workbench which you can do with the installer program on the same Install disk.
k) You should now be finished. Reboot and have fun.