It won't show as a hard drive in My Computer until you format the volume. Go to Start->Run, enter in diskmgmt.msc, and hit OK. You should see the volume and be able to create a partition on it.
The iSCSI Terastation is not like the regular Terastations... You won't be able to directly access the same volume from multiple computers, and you won't be able to back up a Terastation to it.
The only way to use the iSCSI TS as a network location is to mount the volume on a server, then share that volume using the server's File and Print Sharing capability.