Since I did not get a good answer from anyone I thought I would post the results of my research for other people with similar problem.
A simple answer is that Lazarus / free Pascal does not have a command to format USB devices at this time. I searched through several of the include files and found lots of other disk utilities but the format command is missing. This is most likely due to the nature of the format command being OS dependant.
The format command lives in fmifs.dll. The trick to calling it is to make a wraper for it.
I found a Delphi object written by Magenta Systems located at
http://www.magsys.co.uk/delphi/ that was very close to what I was looking for. The object needs a little conversion to work under Lazarus which includes defining a pointer to a Boolean and specifying the keyword "pointer" in the GetProcAddress() calls. Some of the debug printout utilities use a vaguely referenced TRIM() function call that confuses FP unless you include the "{$mode objfpc}{$H+} " at the beginning of the unit to tell it to use Delphi defaults.
This object looks like it can format any drive so I made sure the device was removable by using the GetDriveType() function frist.
This object was written in 2005 but as far as my research can determine, the Windows DLL is still very much a part of the XP system. It was already on my system.
Good luck
Mas