Formatting an External HDD

I have a 1TB Time Capsule for backing up my MBP. I also have a new 1TB Western Digital external HDD which I want to use for storing photos and videos.

My wife uses Windows XP on her desktop (I'm still working on getting her to switch.) Some of the videos are more than 4GB which I understand FAT32 cannot store. The purpose is to clear up disk spaces on both laptop and desktop. We would also like to access the files without compatibility issues. What would be the best format to use on the WD?

NTSF. Google NTSF-3G.

You can format as NTFS and still read it on the Mac. Unfortunately you won't be able to write to it in that format without installing other software on your Mac. Actually, if it's on a Network, you may be able to.

NTFS. Only use FAT32 for USB drives.

http://www.mac-forums.com/forums/airport-networking-wireless-technology/99795-how-does-time-capsule-work-both-windows-mac.html

I did some searches for NTFS-3G and it seems interesting. However, it's a fairly new format is it not? I believe the major difference over the regular NTFS is that the 3G allows you to read and write with OSX.

Has anyone had any experience with this new HDD format? If so, has there been any encountered issues?