It will be NTFS, FAT32 plays happily enough with X.

Select the drive in the list on the left of the Disk Utility window, you may see it listed twice, once by manufacturer name and model, then again below listed by the partition on it. Select the top one, then click the 'erase' tab on the right side of the window. There is a drop down to choose the format (Go for Mac OS Extended, journaled). Then hit the erase button. You'll be good to go.
You could choose MS-DOS as the format, then you'll be able to use the drive with both your Mac and your PC. If you don't want to use it with the PC, use Mac OS since it is more reliable over the long term with Macs.