In XP you cannot format any partition larger than 32GB except to NTFS - it simply won't let you. You would need to use a third-party program.
Windows cab talk to FAT32 partitions larger than 32GB - it just won't let you format one.
As to why NTFS format hangs at 95% I have no idea - perhaps the drive is faulty? Looks quite possible as the same happens in two systems.
Incidentally 8MB and 233GB is an odd structure. Is the 8MB left over in the partitioning?
Why not try removing both partitions and starting again. A full format of 233GB will take a long time - an hour, I'm not surprised at.