Quick formatting explanation please
 

I just got a mac, I've been a PC guy all of my life. I want to be able to work on a project on my PC and then plug it right into my mac with out having to transfer files back and forth between any hard drives. How do I need to format my external HD to be able to read and write from both my mac and pc?
From what I understand it needs to be FAT32. But does the HD or at least the partition have to be smaller than 32GB for it to work like that? Help me out, thanks in advance.