You can't put files larger than 4GB on a fat32 drive at all. If you manage to take that Bluray video, compress it down to less than 4GB, then you'll be in business.
...that or cut the file into 4GB chunks. Either way, you can't put the full movie onto a fat32 HDD.
You should be able to format it to fat32. I've only gone as high as 500GB. I have handy free application that does it pretty quick (it's a simple executable file). I can't remember the name. If you want it, PM me.
One of the latest firmware updates to the PS3 allows for sequential video playback. I have not tried it yet, but it should allow for almost seemless play for split movies. Anyone tried this yet? So if you compress and split your movie into 4GB chunks, then everything should work fine. Whereas in the past, after the first 4GB chink played, you would be taken back to the XMB where you would have to then manually start the second chunk.
Also, I'm not sure what you mean by "d/l a bluray," but outside of xvids, the PS3 is picky with what format the movie is in. It will not read the mkvcontainer. If you have those files, then a conversion to a compatible format would be needed (ie. VOB). mkv2vob is a program that will do this conversion and also split the file into fat32 sizes for you.
