IBM Deskstar Model IC35L040AVVN0-0

When you say try to convert, you mean reformat from fat32 to NTFS? Depending on the size you may not be able to write it as a NTFS. Also, if you have anything on it you want to save, you need a raw recovery tool Squidoo has a good one.
However, if it won't let you format to anything and keeps reverting to raw, most likley your drive is damaged beyond normal repair.

Install the drive on a working computer and access through disc management. that will allow you to initialize the drive and format it ntfs. Goto my computer right click select manage select drive management. This works on XP if you have other OS than search for disc management for your OS.

Run diagnostics on the drive it may be failing. If it's ok you can try to reformat it from Windows Disk Management.

Or if you need to recover data for remote data recovery and do-it-yourself data recovery see http://FreeDataRecovery.us

What you need to do is that, make a backup from the HARD DRIVE onto another drive or computer then you will have to format the Hard drive. You are getting those errors because the conversion might not have been completed successfully or anything like that.
This is how you can format it
Go to start, Right - click on "My Computer" go to "Manage"
Then go to Disk Management in the Right pane. Then select the drive that you want to format to NTFS.
Go right at the bottom, right-click on the desired drive and select format. Formatting a drive n this manner will ERASE ALL DATA from the drive. This is why it is very important to Do a Backup of all your data before you do anything. Format your drive with NTFS

In Windows 7, you can use Disk management to detect and create a partition on this drive if necessary.
Steps: 1. Connect your external drive through a USB port.
2. Click Control Panel - System and Security - Create and format hard disk partitions (under Administrative tools)
3. Your drive should appear in the table below. Select the external disk and Right Click on it. You will be presented with several options (Create partition, Format, etc.). Select whatever is applicable in your case.
4. Your external drive should now be detected by Windows 7.

The external hard drive can remain formatted as FAT32. NTFS and FAT32 are the file systems used by the individual disk drives, and do not effect the data being read or written (i.e., you can transfer data between the two with no worries about compatibility). There ARE differences, however, and many would suggest using NTFS to avoid some limitations with FAT32. For example, FAT32 drives have problems with individual files over 4GB. Formatting in NTFS is definitely recommended for people storing large files like video and other media files.
Yes, you can move any data you have off of your external hard drive (to your system hard drive or another external you use temporarily), format your external hard drive with NTFS, and then transfer your backups and other data back to your newly formatted external drive.
You can also convert the drive to NTFS; but I recommend backing up the data first anyway in case of (rare) problem during conversion. Here is a link that has directions for both scenarios (scroll down for conversion info) for Windows XP. http://www.microsoft.com/windowsxp/using/setup/tips/advanced/ntfs.mspx
The process to convert is similar for Vista and 7; here are the instructions from MS: http://windows.microsoft.com/en-US/windows-vista/Convert-a-hard-disk-or-partition-to-NTFS-format

sounds like you're trying to format with FAT 16 or 32 which limits the partition size.
Try formatting with NFS which has no limit on partition sizes

The best you can do is buy a small cable (+/-€ 10) IDE-USB. This cable lets you connect your IDE drive on a pc using USB.

Yes, it can:
Before you begin, connect your external hard drive.
To format the drive with NTFS
1.
Log on to your computer as an administrator.
2.
Click on the Vista Orb right-click Computer, and then click Manage.

3.
Under Storage, click Disk Management.

4.
If the Initialize and Convert Disk Wizard appears, click Next. If the wizard does not appear, skip to step 8.

5.
On the Select Disks to Initialize page, click Next.
6.
On the Select Disks to Convert page, click Next.

7.
On the Completing the Initialize and Convert Disk Wizard page, click Finish.

8.
Right-click your external drive (which will probably be drive E or drive F), and then click Format.
9.
In the Format dialog box, type a name for your external hard drive, such as Backup Drive. Then, click OK.

10.
Click OK again.

Windows XP formats your external hard drive. Within a few minutes, your drive will be ready for you to use.