I haven't tried formatting the card yet, but previous posters say they have already tried that. And the card better not be dying because I just bought it yesterday. EDIT: Aha, so I was using a really old version of the Homebrew Browserby fatboy3 - Homebrew General
Okay, I'm having the same problem... I installed HBC using a 4GB microSDHC Card, but after running the HBB I also got the "failed to initialise FAT subsystem, exiting" message. Im using HBC 1.0.3, IOS61 v19.26by fatboy3 - Homebrew General