So I got this 2 gig Hard drive to use for backups. When I get to the disk manager to format the disk (1863.2 unallocated) I am offered a choice of partition style: MBR (Master Boot Record) or GPT (GUID Partition Table). I've read that GPT is necessary for drives over 2 gigs but would it make any difference on this size drive? (I don't intend any extensive partitioning).
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You want MBR, it's the standard.
Yes, use MBR. GPT can not be used as a boot drive in Win7. Also, XP can't read GPT drives at all.