Reformatting external hard drive?

Hi,
I recently bought a 640 GB Comstar external hard drive for my macbook, and it came out of the box formatted in NTFS. I know that if the drive was in this format, I could not use it with my mac. So I opened up disk utility and tried to reformat it into Mac OS Extended (Journaled), but disk utility showed an error and the drive wasn't reformatted. So I tried FAT32 instead, and it worked. The drive has been working fine now, however, I have realized a limitation of FAT32: the files can only be smaller than 4 GB. This is a problem for me, so I need some advice. So here is my dilemma: I need to be able to share the contents of the drive over a local network that has both windows and mac computers. (Users on the network only need to be able to read the drive, not necessarily write). However, I can't use FAT32 because of the file size limitation. I'm not sure how to format the drive so that I (using my mac) can read and write it, and users on the local network can read it. I'm thinking HFS+ (mac os extended, journaled), but will windows users be able to read it then? Sorry if I sound like such a newbie.
Thanks in advance.

Hey thanks for replying to my thread so quickly!!!
Ok so I tried using disk utility to erase the drive and reformat it into Mac OS Extended (case sensitive, journaled), and it seemed to be working for a few seconds, until disk utility gave the error:
"Disk Erase failed with the error:
File system formatter failed."
Now I seem to be stuck, I'm not sure what to do.
Any advice? Again, thanks in advance!

Edit: I also tried to Verify and Repair the disk, but neither of those worked.

Thanks, caveman, I actually figured it out myself; I repartitioned the drive and created a single HFS+ partition. Thanks to everyone who helped out!