It won't let you format it because you are using it. You can't format the C drive if it's in use. And since you sound like all you did was right click and chose format, I'd say it's a safe bet to say you were logged into the computer.
Ok so the solution. Click the start button, and then select RUN. Type in CMD. Ok next you have to use the convert command.
Type this:
convert c: /FS:NTFS
then hit enter. Now it should ask you for a volume label if you have one. Type it in and hit enter. The volume label is found by, opening my computer and right clicking on the c drive, then select properties. There's a section there that says label. If there's something there that's what you type in. If the box is blank then it shouldn't prompt you for a label.
Ok it may ask you for a new label and if does you can put whatever you like in there. It's going to tell you that it will do the conversion the next time you start your computer, select yes. Restart and let it convert.
Done.
Good luck.