I got my e260 stuck in NTFS and could not get it to reformat to FAT. After looking for 2 hours i found how to fix it.
Power off player.
Move HOLD button to locked position (towards headphone jack).
Press and hold the RECORD button.
Connect to computer.
You can let go of the RECORD button once you see a message to the effect MSD Connected.
Open My Computer.
Open 16MB-FORMAT drive.
DO NOT ATTEMPT TO FORMAT THE 16MB-FORMAT DRIVE
Create a new folder on the 16MB-FORMAT drive called sansa.fmt
Use Safely Remove Hardware icon (or Right Click on 16MB-FORMAT and choose Eject)
Unplug player from computer.
The player should now format itself and boot back up into the Language selection screen.
This was posted by TheMarkster so send thanks to him. Im just reposting under a name that will be easer to find in a search.