How do I pass the following error message in the Boot Camp Assistant: "Please format the USB drive as single FAT partition."?
After some trial and error, I finally figured out what the problem was and found a solution. Hopefully this will help those who come across this thread with the same problem.

The problem: Reformatting using Disk Utility did not create a child partition, but only formatted the whole drive as FAT. In Disk Utility one can derive this from the "Partition" button being greyed out when the USB drive is selected. In Terminal, the diskutil list command shows the USB drive having only one DeviceNode (labelled 0).

The solution: Reformatting the USB drive using diskutil in Terminal. This is the command line equivalent of Disk Utility, but unlike its GUI Counterpart, it creates a child partition, which in turn solves the error thrown by Boot Camp Assistant.

WARNING: Proceed with caution! If you have never used a command line interface before, you might want to ask a tech-savvy friend for help. I take no responsibility for the outcome of this. If you fry your hardware in the process, that's on you. Good luck!

Stepwise:


Open the Terminal application. You can find it by searching Spotlight for "Terminal" (sans quotes).
In Terminal, type diskutil list and hit enter.
Look at the results and determine the identifier of your target USB drive. It will look like this: /dev/diskX. If you have only one external drive connected, this should be easy to figure out (hint: behind the identifier it says (internal, ...) or (external, ...)).
Run the following command to reformat your USB drive: diskutil partitionDisk /dev/diskX 1 MBR fat32 NAME 8G. Replace /dev/diskX with the identifier of your drive which you obtained in the previous step. Replace NAME with the name you want to give the partition (which essentially doesn't matter). Make it all CAPS to avoid problems. Replace 8 in 8G with the number of Gigabytes you want your partition to have. It's easiest to just go with the total size of your USB drive.
Wait for it to complete.
Verify the output. The end of the command's output should show the formatting of your drive. You should see two DeviceNodes: 0, of type FDisk_partition_scheme, and 1, of type DOS_FAT_32 and with the identifier diskXs1 where X is a digit corresponding to the identifier you found in step 3.
Run Boot Camp Assistant again and be happy because it finally works like a charm.