I was able to format the USB drive with the file system I needed. Important to note however, that I did not have an issue going into "My Computer" right clicking the drive and choosing format. This ...

I have a bunch of 100mb Zip disks that I read/write protected with the Iomega Zip tools on an old Win98 PC which has gone. I have just tried opening them on another XP box and it just won't have it.