The MDD should recognize your larger drive. My 2002 Quicksilver does.
The MDD may read the MBP discs but I sincerely doubt it will boot from them which is what it would have to do to install 10.5. You will have to obtain a retail set of discs which will not be easy nor cheap.
Texas Mac Man, Leopard disc sources - https://discussions.apple.com/thread/3636662
"a brody" post about upgrading to Leopard - https://discussions.apple.com/thread/3373795
Neil and Limnos:
Thanks for the help! The program I used for the drive issue was SpeedTools ATA Hi-Cap and I was able to find additional information on line.
Also, I should have mentioned that the disc was a 10.5 System Update disc that came with my MacBook Pro when I purchased it in December 2007. Mac OS X 10.5 had been released but 10.4.11 was installed and running on the MBP. I received this Mac OS X v10.5 CPU Drop-in Kit, 607-1023 disc. I used it to update the MBP and then let it gather dust in my computer closet. Last night I thought, what the heck... it worked and now I have scores of updates to plow through before I can back it up.
Thanks for the help!