Hey , i carry Cybershot- DSCT20 cam
I too have come across this issue "Memory stick formatting error" .
The solution for it is , i fornatted the MMC using option format-> fat32. and after completion umount and insert the same in cam.
It works prefectly!
I used gparted in Linux and detected as /dev/sdb1/ -> rite click on the list /dev/sdb1-/media/disk-1/ -> format to *ext2, *ext3, *fat16, *fat32 etc. You format using **fat32 and umount the same.
All d best!