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In the pulldown for "Format", there are only the following options (other than various Mac OS Extended variations): MS-DOS (FAT) and ExFAT.

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Selecting "MS-DOS (FAT)" will automatically format as FAT16 or FAT32 depending on the target's size.

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+agreed, I've done this with flash drives – Robert S Ciaccio Dec 16 '10 at 15:39
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Don't overlook the options button - it's best to choose Master Boot Record as the partition format for maximum backwards compatibility. Most are already set that way but I've seen some that needed this to work well with a FAT volume. – bmike♦ Apr 27 '11 at 17:52

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