The specific enclosure I'm using is a Eagle EB-240-00065 mesh case. This retails for about 10$, depending where you shop.
[You'll need a PH#000 Screwdriver. This is often included with the kit.]
The majority of HDDs you can buy will come, if default formatted, as NTFS. This is also the most prominent option in Windows XP's built in formatting utility.
The problem is, a Mac can't write to an NTFS drive [it can access it, but not change the files located on the disk].
For other operating systems to have write-access to the drive, it can be formatted as FAT32
* Always make sure you are not electrically charged before working with hard drives.
Step 1: Preparing the Drive
When you unpack your enclosure, note you will have four smaller screws for securing the case, and two slightly larger ones for the circuit board.
Begin by taking any chassis off the drive. The holes in the side of the drive should be free of screws.
Step 2: Seating the HDD
Plug the circuit board into the drive.
Seat the drive carefully in the bottom of the enclosure. The bottom will be the piece with spaces for the miniUSB and optional power jack.
Screw the circuit board to the enclosure.
Step 3: Closing Up the Drive
Screw the enclosure closed.
Plug your USB HDD into your WinXP computer. Wait until it detects the drive automatically [or, if you have this disabled, mount the drive by hand].
Step 4: Windows XP Computer Management
Right click on My Computer, in the menu locate the option for "Manage". This will pop open an new window called Computer Management.
In the Computer Management window, Select "Disk Management" [Located under Storage, near the bottom of the window].
Step 5: Erasing the Drive
You should see your HDDs located in the right window. Right click the external drive and select "Delete partition". Complete the steps it takes you through until the step that asks you to format.
Don't format it, just leave it as a blank partition.
Step 6: Formatting As FAT32
Go download h2format.exe and stick it in your root [c: for most people].
[download here: http://tinyurl.com/ch2ob]
[If you're concerned about running an exe in root [which is never recommended for untrusted files], you can run h2format.exe from any directory.]
Open command line, go to root [if you're having trouble remembering your terminal-fu, see the Wikipedia article on DOS commands].
At root, type in H2Format H: [wherein H: is the letter of your drive]
It'll take about half a second, and it's done!
[Here's an alternative walk-through for the FAT32 format just in case: