Instructions
Connect the USB hard drive to one of the USB ports on your computer. Click the "Start" button in the computer's task bar and select the "Computer" option. Ensure that the external hard drive appears as a removable storage device icon in the "Computer" window. Doing so will ensure that the cables are functioning properly and the hard drive itself is not defective because, unlike the PS3 system, a computer will detect and display an external hard drive, regardless of format.
Right-click on the hard drive's removable storage device icon and select the "Eject" option once you are sure the hard drive and its cables are functioning properly and disconnect the device from the computer.
Turn on the PS3 system and plug the external hard drive into one of the USB ports on the front of the system.
Scroll over to the "Photo," "Music" or "Video" section of the XrossMediaBar. These are the sections in which a FAT32 hard drive would appear.
Scroll down to the bottom of your section of choice. If the hard drive's removable storage icon is visible, the hard drive is in FAT32 format. If the hard drive is not visible, the hard drive is not in FAT32 format.