You are very much on the right track. In my experimentation, I have found that one does not need to pre-format the drive, the iPod will do it for you. One thing to keep in mind is that if you bought a used iPod, chance are the battery is pretty worn down and will likely not hold a charge for any length of time. Get yourself a new battery and start the whole process over. I (mostly) followed brsedu's guide, differing on a few points but eventually getting a very workable 448 GB version on a 5.5 80 GB iPod. I also built a 256 GB on a 30 GB 5.5. When formatted via the iPod Restore, the 256 now has 238 GB of available storage, which is enough for most. My only challenge with this one I have not been able to understand is I am not able to put 230 GB of music on it - it just cannot handle the load - I had to back off to 156 GB with 82 GB of free space to make it function...this lead me to the 480 GB Crucial mSATA.
So, get a new battery, put the old HDD drive back in, fully charge and start all over again. But don't expect the full 256 GB, as you wont get it based on my limited knowledge.
Also, as Tarkan notes on his website and in his directions, once you load data on the mSATA, let it sit connected to power for 10 minutes or more, so the mSATA can do it's housekeeping chores. I totally forgot about this in my exuberance to play with my new toy, causing me many hours of frustration.
In my opinion, if you can get to a Windows machine and perform a "Clean" on your Crucial 256 GB chip you will be able to really start from scratch - see the Crucial website for instructions. In my 480 GB version, I put the uninitialized drive directly in the iPod and let if format it through Restore and it performed quite well - I am working on a post of what I have learned to date and why - though I guess I have most of what I have learned in this reply, just not organized - ha!
Finally, many have mentioned going with a Crucial mSATA as you chose. I did indeed try other manufacturers with VERY poor results. I think some of these actually draw more the the 3.3v power that is standard for the mSATA. One test is, if you plug it in to a USB powered enclosure and it recognizes the drive, asking to initialize the drive (you don't need to,) then you have a good candidate. The other manufacturers I tried were not even recognized. Crucial's fired up, lights blinking ready to be initialized. I have read Samsung is good too, but I have not personally tried their mSATA, but I do have their SSD's in some of my other machines. (Not making any endorsements here, just noting what has worked and what has not.)
Have fun - I just received Tarkan's version of the ZIF to mSATA adapter and have not had a chance to tinker with it as of yet. Looks beautiful though. BTW, I don't think I mentioned it, but the 480 GB version noted above seems to work very well thus far; and it holds my entire 230+GB collection of music. Taking it on a business trip next week, so I'll see how the battery holds up.
