Yeah I tried the DOS command line for FAT32 formatting, and it also fails as being over 32GB. I think you need a utility for that.
That said, like the previous poster, I used NTFS, worked for me.
The catch is, it takes a LONG TIME to read all of the meta data for albums and artists and stuff. At first it only showed about 15 artists, wouldn't let me browse directories, but eventually, let's say approximately 30 minutes later, everything was good.
Thanks to everyone who chimed in.