An easier option IMO is to just connect it to your PS3, then go into the system options and choose Format and pick the USB drive from the list. The PS3 will format it using FAT32 and you're guaranteed the structure is exactly what the PS3 is looking for.
Originally Posted by Braveheartofg
Formatting always results in a loss of data. The drive appears fully erased, although technically unless you zero out every byte on the drive the data is still there.
If you're talking about the internal PS3 harddisk, then you're SOL because nobody knows how to break the encryption on it yet. And if it is truly dead, then I don't see how you're going to get any data off it anyway. You'd have to give more details about your situation if you want a more detailed answer.
Oh and BTW, the PS3's internal harddisk doesn't use FAT32.