Hi Davo,
Thank you for your advice. I just tried what you suggested and yes it worked. Using the XFS file system allowed me to mount the share in Windows and copy files to the external hard drive when it's connected to the linkstation.
Sadly however, I must revert back to FAT32 for disaster recovery purposes. If the linkstation mini were to go down, I need to be able to unplug the external hard drive and mount it directly on a Windows OS box. For me trying to trackdown a XFS file converter in a DR situation is not my idea of time well spent.
At least the built-in backup software is able to write to it so for now I'm willing to work with this limitation. Who knows, maybe Buffalo will someday come out with a upgrade that will take care of this issue.