Welcome to the board, both of you!
It should accept both types according to
this.
You could format a card or HDD with WinUAE, or on the a500 booting from a wb disk with hdtoolbox, or from the Octagon disk, or another hdd should you have one connected somehow.
If it's indeed an Octagon 508 and not an AT-BUS 508, it's SCSI, so you cannot use a CF directly.
You'd need an (expensive) scsi-ide adapter (Acard or Yamaha) or something like the
scsi2sd.
Finally, old scsi controllers do not nessecarily work with modern large drives.
I don't know about this one, but I'd start with something <= 1GB.
Edit: Ah. quite an old post. Oh well..