External hard drive for both windows and mac

hello, all - just bought a western digital 500gb my book premium edition external hard drive. will be using for both pc and macbook, not necessarily to share files (though i may on occasion), but rather as a backup. been researching the discussion boards and concluded that i should use it as pre-formatted fat32. few questions...
1) if i do use to share files, from what i understand i will be able to read windows files with my mac but i can't read mac files with windows (unless i have macdrive installed). is this correct?
2) since mac can read/write to fat 32, is it necessary to partition the drives and keep the files separated? i talked to a "computer guy" earlier today and he said i should consider having two completely separate external hard drives as having files from two different operating systems on the same drive could cause major problems for both... i didn't really believe him.
3) i have seen different posts stating using fat32 format for mac limits file size to 4gb. another post said 32gb. which is right? i have os is 10.4.7 if that makes a difference.
thanks in advance for any insight.

2 - i don't mind partitioning at all. but he strongly suggested not even partitioning but using two completely separate hard drives. yeah, the 500gb was a bit overkill, so if i can use it for both as opposed to one and buying an additional, i'd rather.
2/3 - if i partition, is it best to divide it into ntfs and hfs+? or should i keep the pc portion fat32? if the mac portion is hfs+, can i store any size file? i have videos that are anywhere from 10-20gb, and i'd like to get them off my computer and into the external drive.
thanks.

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