I have an old 512mb 2,5" laptop drive on my A600, it works great. A couple of things come to mind..
1. Verify the orientation of the cable on the motherboard connector.
2. Verify the orientation of the cable on the HDD connector. My HDD had some extra pins for jumpers, and I could actually plug the cable in wrong using these pins..
3. Could power be a problem? Is it a new drive which draws a lot of power? I don't know how much the A600 can output to the HDD.
4. Any jumpering to take care of on the drive?
5. The kickstart version of your A600 might be important for actually using the drive. I think anything earlier than 37.300 does not have support for the internal IDE, and support for drives larger than 40mb was supposed to come with 37.350.
Good luck :-)