FAT32. Try formating on the device though I have never had trouble with pre-formatted cards.
Did you buy a reputable card from a reputable dealer?

Usually it came with FAT32 formatted.

But if you want to boot from it yes you have to have 2nd partition as ext2 or ext3. The 1st one is fat32.

Partition a card: read this but before that you need to become root (use rootsh)

Want to clone? Then this.

Remember your 32G in the adapter is mmc1 not mmc2.

so: what you see in the media player doesn't match the file structure on your sd-card - is that it?

you expect the media player to present this "miscellaneous"-folder as it is on your card?

i don't use my Maemo 4 lead device for music playback (in fact, i dont use any mobile device for that...), but from what i know.... from what the young people tell me... i believe that music players simply don't work this way. they don't care where a file is in your file system. they ignore folders.
instead, they group tracks by the artist/album/title-information embedded in most every file. this is why some of the music in your "misc"-folder shows up together with the other songs by the same artist.

i find his behaviour very annoying. but it is said to be "user friendly" and whatnot. - so live with it.
all you can do is create a playlist using a variation of the script given above (you need to adapt it so it reads wma also). you could, of course, find an application to edit the tags in your files and set the album/artist fields all to the same value (like: artist=your name, album=the very best of). if you ever share these files, people will kill you for that, though.

Mediabox is able to handle large collections, is has awesome, finger friendly UI and you can set the player engine for different formats! Just go over to the app manager and install.

if FileManager wants/needs to reformat the card, and it is blank, I'd go right ahead and let it. As for what format system, if you don't care, go with the default. If you are worried and want to make a choice, I'd says that if you want to use the card in a Windows PC, use FAT32, if UNIX or Mac, select ext3.