same problem here.
with Seagate External Drive. Takes about ten minutes to appear in Disk Utility but never appears in Finder. In Disk Utility permission options are grayed out. Erase gets a "POSIX" error. Ran directly through Terminal and was able to erase the disk but not format:
Macintosh-4:/ Mustafa$ diskutil secureErase 2 /dev/disk3
Started erase on disk3
Pass: 1
Pass: 2
Pass: 3
Pass: 4
Pass: 5
Pass: 6
Pass: 7
Finished erase on disk3
Macintosh-4:/ Mustafa$ diskutil partitionDisk disk3 2 MS-DOS A1 500M "Journaled HFS+" A2 0B
Started partitioning on disk3
Unmounting disk
Error: 12: POSIX reports: Cannot allocate memory
Macintosh-4:/ Mustafa$
Been looking for a solution for a while, i thought maybe it was a hardware failure but the drive is less than a month old and after research it seems a lot of people are having this problem since upgrading to snow leopard. Any ideas anyone???
Noticed also that in Disk Utility the drive is showing up as being 2.2TB when it is actually only 500GB.