Humm... If you can see the drive and run Disk Utility on it while started up from your Install DVD or from OS X on an External Hard Drive, then it should work providing that you have correctly formatted and installed OS X.
1. Startup from your Install DVD or OS X on another drive and open Disk Utility.
2. Highlight the new SSD in the list of drives and select the Partition tab.
3. Under Volume Scheme select 1 Partition and click on the Options... button.
4. Select GUID Partition Table in the drop down window and click OK.
5. Set the Format to Mac OS Extended (Journaled), name it and click the Apply button.
6. Once that is done, Install OS X and/or Restore from the OS X that is on your External Hard Drive.
Another option is to place the SSD into a External Enclosure and follow the same steps above. Startup from and test the SSD in the External Enclosure, then reinstall the SSD into the iMac.