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You can use virtual dub to do the both. It is free as well. www.virtualdub.org/

I would suggest formatting it on a different system. Also try formatting through command prompt with format command if it works. If it is not possible, First run a disk check on it using chkdsk command. It will fix file system errors and you'd be able to format it fine then.

Its' disappointing to see it being sold so cheap...$7.8m is so little for the pioneers of file sharing.