Yes
I ran into the same issue and found that you did have to format. After running the bootcamp partitionining (assuming you're creating a single partition), when you boot into vista, you'll see 4 partitions (wierd but somethign to do with the way OSX does things to the disk). Find the larger of the 2nd set of partitions (one that closest matches your requestion partition size) and then format it. Once you do that, Vista will install just fine.