Follow these instructions to use drive setup to format your drive as a Macintosh Extended format volume.
(1) Boot from the OS 8.1 CD or the Disk Tools Diskette for Mac OS 8.1
(2) Open Drive Setup
(3) Select the hard drive you would like to format
(4) Click the initialize button
(5) Click the customize button
(6) Select the number of partitions you would like to create (if you do not want to partition the drive, select 1 partition)
(7) Select the type of format (Macintosh Standard or Macintosh Extended Format (HFS+))
(8) Click OK
(9) Click Initialize