I cant open my external Hardrive WD 500ME, do i can't retrieve all my files inside. It shows when i try to open that the drive need to ber formatted.

You don't have rights to the folder. Right click the folder --> Select Properties --> Security --> Advanced --> Owner and then change the owner to your user. Here are some instructions from Microsoft for taking ownership. Once you own the folder then you can do whatever you want.
http://technet.microsoft.com/en-us/library/cc753659.aspx

Could you confirm if the problem with the drive not being recognized is a problem with the USB cable? I have a 250GB passport and it worked fine with my XP. Once I decided to reformat it to NTFS and tried to do so by plugging into my new windows7 laptop the problems started.

I'm sorry to say that this may be due to a corrupt HDD. WD Hard drives tend to die far too fast (I know too well unfortunately).
If this is under warranty, I would call up WD support service for a free replacement.
If you want to take more invasive steps, I will be happy to help you try and recover your files.

disconnect your WD ext HDD. and reboot your computer. then connect again. if still not showing. go to device manager (right click my computer then properties -- click device manager). expand by clickin "Disk drives" category here it will show all the hard drives installed in your computer including your WD ext HDD . if you see yellow sign on your external drive right click and remove then go to Action menu click on Scan for hardware. it should detect and install the driver again. if still the same or maybe its not on the list of Disk drives.. try to change another USB cable .. i hope this will help

An external storage-device has four major components:

* the USB cable

* the power-adapter

* the disk-drive inside the enclosure

* the USB-to-disk-drive adapter inside the enclosure.

One of these components has failed.

Try a different USB cable.

Try connecting to a different USB port on your computer.

Try connecting to a USB port on a different computer.

Take a "multi-meter" and measure both the voltage and amperage output from the AC adapter, and compare with the specifications on the label on the adapter.

Open the enclosure, and remove the disk-drive, and then connect it as a "slave" disk-drive in a desktop computer, to see if it works at all.

Purchase a new, compatible, disk-drive, and install it in the enclosure, to "revive" your external storage device.

Get the part-number and serial-number from the label on your disk-drive, and access the manufacturer's web-site, and use "check warranty status", to see if they will replace the device, at minimal cost to you.

Note that W.D. has a "Customer Loyalty" program -- you can buy a new W.D. device, through the W.D. web-site, at a significant discount.

There exist commercial "data recovery" services that can try to repair your device, just long-enough to rescue and copy your files. For example, see: https://services.seagate.com/index.aspx?lng=en-US for a "no data - no charge" guarantee.

Try connecting it to some other computer, and see if you can retrieve it. Also try a different OS too if it does not work.

you can't open it because this is a cause of viruses in your hardrive and your drive is infected i have this problem 2 weeks ago and fix it. open it from my computer right click go to manage and go to disk management open your drive from your WD. delete unrecognize files and hidden files.

I have a Western External Hard Drive 320 and when I plug it in the computer will recognize it and allow me to access my files but after a short while if I go to click on a file t open it the WD 320 will click off for a minute and then reappear in the auto run mode.

dont worry, you can recover files from WD external hard drive, you need to follow the correct steps, here's a perfect data recovery tutorial for you
Recover files from External Hard drive

The tutorial is very easy to follow as I followed it to get back my files.

Try anthor system with xp os it should be work