What?! NTFS? No, don't do that, unless the only thing you want to do on the Mac-side is read files on the hard drive.
NTFS is read-only under Mac OS X, meaning you cannot change/modify/delete/add files to the hard drive. You can only read them and copy them off of the hard drive.
Leave the drive FAT32 if you wish to be able to both read and write from both Mac and PC.
It may help to do some "general" maintenance, like zapping PRAM and NVRAM and making sure your internal hard drive is in good health (with a good disk & permissions repair with Disk Utility).
Also, when you plug in the drive, even though it doesn't appear on the desktop doesn't mean it's not being recognized -- open Disk Utility with the drive plugged in and see if it's recognized there. You can also choose to mount the disk directly from Disk Utility -- perhaps the disk is OK but just not auto-mounting on the Macintosh.