I was able to wipe, partition, and restore a 640GB external USB hard drive that had the POSIX memory error with Mac OSX 10.6. However, I used a computer running Ubuntu 10.10. I just plugged the external USB drive in, ran GParted from terminal, clicked on my drive, and said format as FAT32. Later, I decided to write all zeros to that disk. I went online and had the commands to run from terminal (using Ubuntu) in less than a minute.
If you only have a mac, you can still run Ubuntu, but do so using a live CD.
Get it free from here for desktops:
http://www.ubuntu.com/desktop/get-ubuntu/download
Laptops:
http://www.ubuntu.com/netbook/get-ubuntu/download
Download the ISO, burn it to a CD using Disk Utility, reboot and hit C while you boot up. Choose the "try Ubuntu without any changes to my PC"
First plug in the bad drive,
Then click on Accessories-> Terminal
Type: sudo -s, hit enter
type: gparted, hit enter
find your external hard drive (make SURE about this!!!)
Select the format option, choose what you want.
You're done.