Well, I have made some progress.

First of all, the fact that I couldn't quit out of the player was something to do with hyperterminal not flushing changes; I tried many changes to HT settings, none of which worked, and then eventually after a restart of HT, communication worked again.

Now, I have followed Roger's partitioning+formatting instructions, with the new drive as a slave drive. This worked well, and the player was able to mount and access the new drive correctly. Now, I want to move the new drive to be the master drive (and eventually the only drive), but the player won't boot with the new drive as the master.
It reports:
Kernel panic: VFS: Unable to mount root fs on 03:05

So, my next question is: can the empeg have an 80Gb disk as the master disk?