Macbook SSD Volume Erase Failed (trying to restore MAC OSX)

When booting from installation disk, open Disk Utility (in the "Utilities" menu) and format the disk as HFS+ with Journaling, case-insensitive. I have never installed a blank disk before, but had to repeatedly wipe the one installed. This is how I did it.

If you have not yet bought your SSD, you should read up on their performance on systems without TRIM support.

Edited to add:

Regarding your different options for system installation: I've had only success (aside from a bad 3rd party driver) using system restoration from Time Machine backups. However, I prefer using a clean installation and only restoring my users. Especially the ~/Library contains a lot of application data I'm not willing to move out of reach, backup or not. Aside from that, it's really personal preference: A "clean slate" versus "the comfort of a familiar system".

Regarding installation:

If you have the "late 2008" MacBook Pro, see this PDF on how to replace the hard drive. If you have the "early 2008" MacBook Pro, the hard disk is not classified as user-replacable. See macfixit.com or youtube for tutorials on how to do that.

The GUID Partition Table (GPT), which your disk uses, stores two copies of its partition table, one at the start of the disk and one at its end. When you did a "bit for bit" copy of your disk to a bigger one, the backup partition table ended up in the middle of the disk. It's impossible to place partitions after the backup partition table.

I'm not entirely sure what OS X's Disk Utility does in situations like this. If it's not smart enough to recognize that the backup partition table needs to be moved (and your symptoms suggest it's dumb on this score), you'll need to do so with other tools. My own GPT fdisk (gdisk) can do this:

1. Launch gdisk on the disk, as in sudo gdisk /dev/disk0
2. Type p to view your partition table. This is mainly a sanity check to be sure you're working on the right disk and that gdisk has interpreted the partition table correctly.
3. Type x to enter the experts' menu.
4. Type e to move the backup data structures to the end of the disk.
5. Out of an overabundance of caution, type p to view the partition table again and be sure you've not accidentally told gdisk to delete all your partitions or something.
6. If everything looks OK, type w to save your changes to disk. You'll be asked to confirm this change.
7. To be on the safe side, reboot. This ensures that OS X uses the new partition table.

After you've done this, you should be able to use Disk Utility to create a new partition. (You could also create a new partition in gdisk, but it won't create the filesystem, so you'd then need to use newfs or Disk Utility to finish the job, so you might as well do it in Disk Utility.)

I'm sure there are other tools that can move the backup partition table, too. In Linux, parted and GParted will do so basically automatically. I'm less familiar with the OS X tools; chances are something else will work, but gdisk is the only one I'm certain will do it.