How can I format an SD card directly inside Android?
These steps were using an HTC EVO with HTC Sense - your menu options may be different but should be similar.
There should be a "Format SD Card" in the phone "Settings". Open "Settings", then go to "SD & Phone Storage", then you should see "Format SD Card". If the option is grayed out then you may need to unmount your sd card first and then format the card. Make sure you have backed up anything you want to save with a backup app or just by copying whatever files off your card onto a computer because this will erase everything on the card.
Hope this helps