What ROM are you running on your Mogul? The earlier ROM's needed an set of upgraded drivers to utilize the larger cards. All the later ROM's worked fine out of the box. I use a 6 GB SanDisk card with no problems. If you are running an early ROM (e.g. 2.09) and you don't want to upgrade, PM me and I'll send you the drivers. Otherwise, upgrade your ROM and it should work fine. You can format your card on your PC. I have a freeware card formatting program that runs on your PC. I'm not at home now but I can post it here later today.
Her's an interesting utility that has a free 10 day trial period if you are using an updated ROM and are still having problems. Might help you to diagnose and fix it:
http://www.cnetx.com/format/