it cannot find a drive with a valid system folder on it.
Couple, or so, reasons for that.
1. The previous owner formatted the drive but did not install OS X on it.
2. There is a system on there but it is corrupt and cannot be used
3. The hard drive is defective.
Given the source of this machine, I doubt that you have any of the original installation disks to do any trouble shooting with. You will need OS X installation disks to proceed with this project.
HD's are relatively cheap and are easy to install on this machine.
Of course, this assumes that this machine is actually a MacBook and that you are not using that name as a generic term for an Apple Laptop.
I got a macbook from the goodwill. It boots up to a gray screen with a question mark. Does this mean the macbook does not work? Any help is appreciated.