ISS_Expert ==> Any follow-up questions? I assume you've formatted the drive by now, but if not, and if FAT32 Format doesn't work in Windows 7, there is an alternative method that definitely works ...
(a) Be sure the drive has the amount of unallocated space you want to use for your FAT32 partition.
(b) Create a 32MB FAT32 partition in the unallocated space (this is the largest FAT32 partition Windows 7 will let you create).
(c) Download the free demo of Boot-It NG [
http://www.terabyteunlimited.com/bootit-next-generation.htm ] and create a bootable CD using the included MakeDisk utility.
(d) Boot to Boot-It; choosing CANCEL at the first prompt (important); then OK. Now go to Settings and check the "USB 2.0 Support" box; then go to Partition Work and select your external drive [Click on HD0, HD1, etc. until you see the correct drive info in the middle screen]
(e) Highlight your FAT32 partition and then click on ReSize. Select the desired size and let it finish.
Done :-)