This is interesting, I had a similar experience with a memory stick and Win7.
The memory stick (Genuine Sandisk 32Gb Cruzer 20 odd Gb used) was working perfectly and has been since new (6 months or so). After plugging in to my Win7 machine at home I had the same problem, unreadable.
Popped back in to an XP machine, the same problem, same message "not formatted do you wish to format now".
I ran a recovery tool, I think it was PC inspector, which fixed the problem, the stick was then perfectly readable in any of several XP machines and I was able to copy all the data off as a precaution.
The stick however , is still unreadable in the Win7 machine.
This leads me to believe that there are some issues with Win7's handling of flash memory devices, now I think back this isn't the first time I've seen a problem with a flash card after plugging in to a Win7 machine.
I've also noticed that Win 7 will usually offer to "scan and fix" a flash device when inserted and have learned from experience that allowing it to do so usually results in destruction of the data.
Pc Inspector is free and can be downloaded at
http://www.pcinspector.de/smartrecov...htm?language=1
FWIW it's possible to format a memory stick with NTFS using this simple procedure.
http://www.lifehacker.com.au/2009/04...in-windows-xp/