When you boot from your xp cd, your system will be checked, for exsisting operating systems and particions, here you can delete or create new particions.
you will then be given the options of how to format your newly created particions options are, Fat 32 or NTFS both options have a (quick) format option, which I personally never use, simply highlight whichever format option you require and let Xp do its thing. As far as I know the fat 32 option is available in both Home and pro versions.