I have a 500gig HD I would like to partition and use to back up both a PC w/ XP and a MacBook Pro w/ Leopard. Can I, and if so, how do I format the drive(s)?

You'll want to create two partitions: an HFS+ partition for the Mac data, and an NTFS partition for Windows. I'd recommend using Time Machine to keep your Mac data backed up onto the Mac partition, and Windows Backup (or whatever you use on Windows) for XP.

I know how to create a NTFS partition in Windows but don't know how or where to create the HFS+ partition. If I need to do it in OS X, will Disk Utility see the unallocated drive? Any specifics would be appreciated.

Use Disk Utility to format one of the partitions as HFS+. It doesn't matter what partition type you use; you could even create two NTFS partitions.

Thanks very much. Hopefully I can be of help down the road.