Hey there, Rlong57!
You can either partition the external drive in two: 500 GB in NTFS (for your PC) and 500 GB in (HFS+ for your Mac).
This will let you backup everything as you wish, but you won't be able to write to both partitions simultaneously from the PC or the Mac.
Here's a tutorial that might help you with the partitioning & formatting:
http://products.wdc.com/support/kb.ashx?id=1vjsB3
If you want to access the whole capacity of the external through both operating systems, you'd need to format the drive in FAT32. However, you won't be able to transfer files bigger than 4 GB (e.g. HD or Blu-Ray movies) because of the file system limitations of FAT32 (or exFAT).
Either way, here's another tutorial that will tell you how to...