|You won't get a C: prompt without an installed Operating System somewhere. You need, as I said, a bootable copy of the Operating System installation files on some device, normally a CD. The installation program will access the hard disk - you have no need to.|
Of course, this may be affected by what OS you are trying to install (for example XP SP2 won't work as is with a SATA drive) and whether your installation media is a genuine copy in the case of a commercial OS.
It doesn't sound as if your USB device is bootable.