Don't Format SD cards with OS utilities!

1 GB SD: SD is not recognized when using SdFat.h

Since you provided almost no information, no output or hardware description, I can't help much.

SD.h is just a wrapper around an old version of SdFat. The main difference is SD.h runs at a slower SPI rate, 4 MHz, vs 8 MHz for newer versions of SdFat.

Often a hardware/SD combination will run at 4 MHz but fail at 8 MHz.

You can set the set the SPI clock rate to 4 MHz with the SdFat begin() call.

sd.begin(chipSelect, SPI_HALF_SPEED);

Please post complete info about you hardware , SD card model, your code, and output with error info.