dont listen to the others in this thread, as they have had trouble getting fat32 working properly, they have a bias towards sticking with what they know (whereas I have tried all of the formats)
u want 1 fat32 partition, the only downside to this is if you have any SINGLE files OTHER than wii games that are larger than 4 gigs, they can't be stored on it (at least not without splitting them into parts using winrar or hjsplit). So if your hard drive is to be used solely for the wii, fat32 is the way to go, if the drive is also used to store high def movies (for example) larger than 4 gigs, u may want to consider ntfs.
using PC programs like wii backup manager, u can easily transfer files to/from wbfs,fat32,ntfs and convert them to/from iso/wbfs/ciso. In fact this program can makes sparsed ISOs (which is the exact same as an ISO but it takes up less space). Default settings is to automatically splits files into 4gb parts if you are transfering to FAT32, and if transferring to ntfs it will transfer as a sparsed ISO (no splitted). These settings can be changed to suit your preference.