Why not format to NTFS.
Win 7 supports that directly unlike XP that required a sorta backdoor approach.
Right click the drive in Explorer and choose format, in the dropdown select NTFS.
Win 7 also supports exFat that has basically no file size limitation.
ExFat is also one of the options in the dropdown.
exFAT - Wikipedia, the free encyclopedia
NTFS is supported read\write in most Linux distros today if that is imortant to you.
At the present time exFat is not supported and won't be until someone reverse engineers it like they had to do
to allow NTFS compatibility in Linux.
It is my understanding that work is in progress on that.
BTW, ext3 and ext4 as well as ReiserFS, all use in Linux\Unix are journalling file systems like NTFS.
Because journalling file systems write to a volume a lot they were thought to not be acceptable for use with
Flash drives like USB thumb drives.
Flash devices have a limit on the number of write cycles (they can "wear out" after a lot of use).
Depending on the maker this can range from under 100,000 to 1,000,000 write cycles.
A journalling file system was thought to contribute to premature wear.
This is why in XP you had to resort to a round about method to format to NTFS.
This is not really a issue today as most makers use a wear leveling scheme in their devices today.
Of course if you only use the drive for storage this wear out isn't much of an issue regardless of FS.
NTFS formatted drives are faster to write to on average that Fat 32.
One thing I've noticed is that deleting files from a Fat32 devices takes much more time compared to a NTFS device.
Especially folders containing many nested folders or hundreds of small files like .ico or .png files.
Hope this helps.