I have the same watch. You can use a new battery, but it's just very very hard to get in. I've repalced my battery twice now. I've found the best way to do it is to remove the back, and hold the battery in until you see the watch working properly. Then use a peice of ELECTRICAL TAPE to firmly hold the battery in that position, then put the washer and backing back on. The backing will continue to hold the battery in for the rest of it's cycle, and electrical tape is non-conductive, so it will not damage your watch in any way.
A non-tape method will be very difficult to keep the battery in while putting the back on. It will slip out. The one time I did it took over an hour to get it right. Use the tape - 5 minutes work for three more years of watch functionality.
Sean, October 2007