So it turns out, as I expected, that what the HP tech guy was saying was a load of nonsense. I recently bought a 500Gb 7200rpm drive, carefully checking the power consumption should be similar to the 5400rpm one I was replacing and..
- it works in the PC - and of course it works as a USB drive.
I think the tech guy was simply looking at the spec. sheets for that model and regurgitating the max drive size it had ever been shipped with by HP.