Taken from Adam Nash’s blog Psycohistory. I apologize for not giving credit more explicitly when I first posted the article.
When you buy a Western Digital (WD) 1 TB My Book External Hard Drive, they usually come formatted for Windows using FAT32. Of course, if you are using it with a Mac, then you’ll want to reformat it using Mac OS Extended (HFS+).
The problem: When you try to reformat in Disk Utility, you’ll get a very cryptic error that says that there was an unknown error with the partition map.
The solution: If you go to the partition map and click the “Options…” button, you’ll be able to select which scheme to use for the boot records. It turns out, if the boot record scheme is set to “Master Boot Record”, you will not be able to format it as Mac OS Extended. Flipping it to GUID or Apple Partition Map will work.
Once you get to that magic dialog, it’s pretty clear what to do. Why Apple doesn’t communicate this error intelligibly when you attempt to format I don’t know.