After a little googling, I found fat32format , a nifty tool that quickly formats a drive in Fat32. Simply download the zip file from here and unzip the contents to some folder on your local drive. Then open up a command prompt as Administrator (find command prompt under Run->All programs->Accessories and right click on command prompt and choose run as administrator). Then go to the directory where the unzipped fat32format.exe file exists and execute fat32format.exe
Its not all doom and gloom with Vista. It does provide the functionality to resize partitions. This is very useful, if you are trying to install a second OS on an existing machine. To resize a partition, simply go to
Control panel-> Administrative tools -> Computer management
Navigate to the Disk Management under Storage in the left panel. You can simply right click on any of the drives and select "Shrink volume.." to resize a partition.