You mention a password, that means that your drive comes with Smartware… So the drive is NTFS.
You’ll have to format the drive to FAT32 in order for the 360 to read it, that can be done on a Mac or using partition software, as Windows will not let you.
You could also take your Smartware Passport back to the store and trade it for a Passport AV, which WD states to be designed for the Xbox 360 on this link to their Web site: http://www.wdc.com/en/products/products.asp?driveid=805