Format External Western Digital Drive to be used with only Mac
The standard for Lion is GUID partition scheme with one volume HFS+ Journaled.

The journaling is preferred since the filesystem can be checked in moments when the system reboots rather than running an exhaustive fcsk each time the drive is unmounted cleanly.

You don't want a case sensitive file system as some programs are not ready for dealing with fiLe.txt being different than file.txt - you'll need extra time for testing / finding bugs if you work on a filesystem that's different than the majority.

You can refer to another question on when GUID/GPT might be better than APM: When is the GUID partition table (GPT) preferred over Apple partition map (APM) for external drives?