Hey there, Chris.
Basically a cloning tool shouldn't require you to format the hard drive as it clones the exact same partition from the source drive along with its file system (NTFS, exFAT, FAT32, etc.) and all the data. If you do need to format the drive - go with NTFS. It's a lot more stable file system than exFAT.
You should have the option to create partition and format them during the Windows installation as well. Check out this tutorial - http://www.sevenforums.com/tutorials/52291-partition-hard-drive-windows-7-install.html. It's for Windows 7 since I don't know what's your version of the OS, but things are basically the same for the newer ones as well.
Hope that helps. Please let me know how it goes.
Boogieman_WD