Instructions
Plug the external hard drive into one of your console's USB ports using the USB cable that came with the hard drive.
Turn on your gaming console.
Open the "My Xbox" main menu. Scroll through the menu until you find "System Settings." Select this option.
Open "Memory." Highlight the listing for your external hard drive.
Select the "Configure Now" option. This process will format the hard drive and install the FAT32 file system. When the process finishes, as indicated by a message on screen, the hard drive will be ready for video playback with your gaming console.