If the drive shows Unknown, right click on the word Unknown and choose Initialize. Follow the wizard, accepting the defaults. The drive should now be labeled Unallocated.
If the drive shows as Unallocated, right click on the word Unallocated and choose New Partition (2000/XP) or New Simple Volume (Vista/Win7). Follow the wizard, accepting the default settings. Clicking finish will begin the format process. The format will generally take 10-15min, but can vary depending on drive size. When the format is complete the drive can be found under My Computer labeled New Volume.
If you wish to change the name of the drive, right click on the for the drive icon and choose rename from the menu.