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The camera uses FAT16 so it won't be able to use cards bigger than 2GB. IF you can format it, you will only have 2GB space available.
Formatting the card: Press Menu/OK, select Setup, Select Format, press OK untill it's done.
The S700 as it came from the factory CANNOT use a 4 gig card. You must go to the Fuji USA website and download the firmware update. You will need to have the program that came with the camera installed, and the cable that also came with the camera. Make sure that you have fresh batteries in the camera. Instructions are on the Fuji website along with the download for the firmware. You are actually going to "flash" the firmware in the camera just as if you were doing a BIOS flash in your computer. Personally, I only use smaller cards and remove the pics soon after I take them. A 2 gig card will hold about 150 full rez pics. Get them out of the camera....don't save them forever on the card!
The S7000 has always been known to have some problems with regular CompactFlash cards, with both power drains and limitations reported (the S7000 seems unable to handle CompactFlash cards above 2GB, as it doesn't support FAT32). I imagine it's possible that there are other potential problems associated with this.
It's usually recommended that, instead of using CompactFlash cards, you use either xD-Picture Cards or IBM/Hitachi
Microdrives, which are both fully compatible with the S7000.
Fuji Finepix S7000 Zoom Memory Cards (xD-Picture Card - M Type) & Accessories
The following memory cards are compatible with your Fuji Finepix S7000 Zoom. Every memory card we offer is manufactured to the highest standard and carries a 2 year minimum warranty. Your Fuji Finepix S7000 Zoom accepts xD-Picture Card - M Type cards. The largest xD-Picture Card - M Type card you can use in your Fuji Finepix S7000 Zoom is 2048MB View all Fuji Digital Cameras
The CompactFlash card may have caused the batteries to drain. Some solid state CompactFlash cards consume power while inserted in the FinePix S7000 even if the camera is turned OFF. Fujifilm recommends removing the CompactFlash card when the camera is not in use. Microdrives and xD-Picture Cards do not exhibit this problem.