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250 gig hard drive and fat 32 and ntfs

I wanted to install windows xp on my new 250 gig drive that had not previosly been used in my new pc.  Wen I reached the stage where it asked me to choose what format, the only choice was "ntfs file system ( quick )" or "ntfs file suste" .  there was no option for fat 32.  What do I do. Is the problem that the hard drive has to be partttioned before installing an operating sysgtem because you cannot install a fat 32 system on a drive that large and so it has to be partitioned first or is it somenthing that I am doing that I do not realize I am doing. I have partition magic 8.  I plan to follow Roberts advice about using some ntfs drives aproximately 50 gigs on one or two drives and partitioning the 250 gog physical drive into at least 10 drives.
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