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I'm not even sure you can format it or otherwise make it go away. It is a separate partition, so even if you erase it, it will still be there. Sony put it there to make setting up a new reader faster.
On a Mac running 10.4 or later, you can drag the volume off the Finder sidebar and remove it so it doesn't show up there anymore. Won't help if you put drives on your desktop though.
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