External HD won't read on xbox 360

I have just bought a Western Digital My Passport 1TB External Hard Drive. I was able to convert to FAT32 file format. Now my PS3 does read the Hard Drive, but he 360 does not. Now I tested the system with my 8GB flash drive (which is FAT32 at default and it works fine) Any ideas?

Im trying to use mine for my ps3 and wondered if you lose storage space on the hard drive when you reformat to the Fat32?