Hi Annie,
I was having that same problem because I forgot to right click on Xplorer360 and select "Run as Administrator". Once I did that it detected the FATX drive no problem. The other hiccup I had was trying to drag-and-drop my content folder onto the 250gig drive (wouldn't let me) using...
Ok, since I'm the paranoid type, I'm going to throw this question out one last time before I proceed with this excellent HDD hack:
Is anyone aware of anyone having their XBL account banned for using a non-MS hard drive?
Everything I can find online only mentions the DVD-ROM firmware hack...