Corrections before people go on repeating wrong things :
SD cards are NOT formatted in FAT32, and no, MS does NOT own FAT32 format.
Natural format of flash cards, SD cards included, is FAT16. It's not even a MS format, but an IBM one IIRC. MS owns patents on long filenames, which is why most devices that uses FAT filesystems use the 8.3 format (8 characters + max 3 characters extension) to avoid a (anti-competitive and abusive) MS lawsuit.
That means your camera, your Windows formatted iPod, ... all use FAT16 natively, sometimes a limited FAT32, but FAT32 is the worst filesystem around in any field (reliability, efficiency, ...). But it's the lowest common denominator compatibility wise.
And I agree that the statement from Nintendo could just mean that you need an ext2 or ext3 filesystem on your disk, with some data that you would need to duplicate on another disk for it to be recognized.
No big deal when you know what you're doing, but most people couldn't do that.
