As far as the low level format, I had one HD that had data(mp3,files,etc.) and I had one brand new HD that I just formated regularly and I had no problems with either.
The 1/2 AGP divider means it is dividing the the front side bus by 2. So if you're running 133mhz the AGP slot will be running at 66mhz; its normal specs. My understanding is that the chipset divides the AGP slot based on the FSB setting. If you were running at 100 mhz, I believe it would adjust the slot to 2/3, once again giving you a 66mhz setting. I hope this helps.
Self