The Pandora OS can read cards formatted with various filesystems, including ext2, ext3, fat32, and if the codec pack is installed, NTFS.
To format a card ext3, insert the card into the Pandora, then open terminal, and type: 
sudo fdisk /dev/mmcblk0 (use mmcblk1 for the second slot) 't' then '83' to change the partition type to linux, then 'w' to save. sudo mkfs.ext3 -m 0 /dev/mmcblk0p1 (or mmcblk1p1 for the second slot)
If you want to set a volume name then type:
sudo mkfs.ext3 -m 0 -L volumename /dev/mmcblk0p1
sudo opkg update sudo opkg install dosfstools
Once installed, you can format a card like so:
sudo mkfs.vfat /dev/mmcblk0p1 (or mmcblk1p1 for the second slot)