I am also having the same problem. I bought 2x 2TB WD 20EADS internal Hard Drives, and couldn't get windows to format them. I tried with one being MBR, the other GUID. Didn't make a difference, but the GUID was totally unrecognisable. The format failed just over 50% on the MBR drive. I thought this was a problem with the disks, so returned them and got 2 new replacements.
I got the replacements, and the same problem was happening. I raised the issue with WD help and they have indicated that this isn't a problem with the drives, but with Windows not recognising the drive, ie a ceiling on the capacity. I tried in XP (32), Vista (32 and 64), on a total of 3 different PCs, all with the same outcome - failure.
I was able to partition the drive as 1TB, but windows failed to format the remaining space.
Since then, WD said that I should use their data lifeguard tool. I tried the version for windows but it had the same problems and when running the test reported a cable problem - note, there was no cable problem.
In the end I used the DOS version (http://support.wdc.com/product/download.asp?groupid=504&sid=2&lang=en), which booted up fine and the tests I ran were good. I then wrote zeros to the drive (took 6.5 hours!!), believing that this would 'format' it and windows should now be able to see it. The write zeros worked, and I rebooted in windows, the disk management tool saw the drive as RAW. Upon initialising the disk, windows STILL WANTED TO FORMAT THE DRIVE. Initially I didn't say yes, but it wouldn't let me access it, so I said yes, and it once more failed to format - same error as earlier.
My conclusion is that the drives are not faulty, and that windows need additional "something" to be able to see large volumes.
So I'm stuck atm, going to look up some articles on Microsoft's website.
Any help appreciated!