Instructions
Power on your Xbox 360 console with your controller and external hard drive connected. Make sure there is no game in the disc drive so that the Xbox 360's dashboard pops up.
Scroll over and select "My Xbox" from the dashboard, then select "System Settings" followed by "Memory."
Select the storage device that you wish to partition/format, in this case the "Hard Drive" and press the yellow "Y" button.
Select "Format" on the subsequent screen then select "Yes" when the Xbox 360 informs you that all information on the device will be deleted. If you are prompted to enter you console's serial number, look for the number on a label on the back of the console and enter it on the screen using the on-screen keyboard, then select "Done." The console will then partition/format, a process that could take several minutes.