The adapter only supports SATA 1 (the drive is SATA 2).
Put the drive's jumper in the "Opt1" psition.
Make the "old" HDD master - hooked up at the end of the ribbon cable.
Set the jumper on the adapter to "Slave" and hook the new HDD up at the middle of the cable.
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If the computer has no SATA ports I wonder if it will be able to see more than 137GB of the drive.