Two opposite answers from the Geek Squad - sounds about right!
First of all, Formatting your external HDD will destroy ALL the data on it. As long as you understand this and don't need anything on it now, you could go ahead. But why would that help? Well, yes, it might.
First step, though, as buzznut pointed out, is that a driver for this device is needed. It's entirely possible that your Win 2000 ME has a driver for a USB external drive, so maybe that's taken care of.
Next item is File System. On almost all XP and Win 7 systems, when you Partition and Format any drive it will default to installing the NTFS File System. I suspect your older Win 2000 ME system does not understand that File System, so it cannot use the drive in that condition. So, if you connect it to the older system and Format it there, it will install a FAT32 File System, and you can use it to store files on. When you take that unit back to your Win 7 or XP systems, each of those CAN read that FAT32 File System and you'll be able to read the files off.
However, be aware that a FAT32 File System is not really good for use with XP or Win 7. It imposes significant limits on performance and especially on file sizes. So when you're finished copying files from the old machine to your new ones, I suggest you the connect it to the Win 7 system and Format it again, this time being sure that it uses the NTFS File System to do the job. Then you're back to an empty HDD ideally suited to your newer OS's.