New passport essential se problem

I just purchased a Passport Essential SE (750GB) and when I plug it in for the first time, I seem to get an installation of WD smartware and it looks like there is an E: CD drive with 446MB and there is no 750GB drive.  The smartware runs (autoplay) but when I try to ‘SET UP DRIVE’ I get a window that tells me that ’ No readable partition found on your My Passport Essential drive.  This may occur if you are trying to use a drive formatted for a different operation system.  Your drive must be formated for this operating system before you can use the WD SmarWare backup feature’.  I’m trying to run this with Windows XP.  I’ve uninstalled the drive (this E: drive) from device manager and tried to restart by plugging the Passport in, but I get the same results. 

I’m not sure what to do except take the thing back for a new one.  Any suggestions before I do that?

Did you check if the drive needs to be formatted before it can be used on disk management? (Right-click my computer --> manage --> disk management).