This sounds like it is a test question - a very bad test question. Both could conceivably be done depending on the circumstances necessitating an operating system install. For instance, if a new operating system was being installed on older hardware with legacy applications in a production environment such as a server farm, it would most likely be tested first on a guinea-pig server to see what it breaks before rolling it out across the whole farm. Alternatively, if the drive was being added to a mini-ITX low power fat client for a dual-boot setup, the system's power budget should probably be checked and the power supply upgraded if needed. Eh, of the two, testing is probably more "right".
Typically in the real world, I...
Backup any manufacturer utilities that I wish to retain that came installed on the drive.
Physically install the drive into the computer connecting it to a storage controller with proper cabling and configuring any jumpers on the drive.
Wipe the drive with DBAN or another utility.
Install the operating system, partitioning and formatting the drive with a scheme appropriate for its application.
