Final Cut Pro 7 and Managing Tons of HD Footage

I have about 80gigs left on my Macbook Pro, but I have about 100gigs of raw footage that needs to be edited. I tried putting them on an external hard drive and importing direct from there, but FCP doesn't even recognize that the hard drive is in there. It is FAT formatted and everything.

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If FCP has to access it, the external HDD has to be formatted with "Mac OS Extended (HFS+)", as FAT32 is not supported by FCP and even has a file size limit of 4GB (per file).

Original raw footage is 30 minutes and 30gigs large. I took a 15 second snippet and it was an estimated 4gigs. The math just doesn't add up here.

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It adds up, as your "RAW" footage is probably using H264 or another MPEG-4 codec to store the video, and FCP wants its footage in either ProRes (can be 100GB for one hour of HD video) or Apple Intermediate Codec (AIC - up to 50GB for one hour of HD footage).

Therefore get another external FW800 HDD (if you have FW800 on your Mac), which you can safely format in "HFS+" via Disk Utility, or format your existing external HDD with "HFS+", if possible as formatting will erase the contents of the HDD.
Maybe you can partition it though.

Format Your Hard Drive Using Disk Utility
Partition Your Hard Drive With Disk Utility

I usually use an external firewire hard drive when editing HD clips. Your hard drive is formatted wrong so try fixing that and see what happens.