You are probably trying to partition the system HDF rather than the CF card. The system HDF does not allow partitions because it is not in RDB mode (fortunately).
You cannot add a new harddrive after Workbench has already loaded up. You have to add the CF card together with the system HDF before you start the emulation.
Make sure that both the HDF and the CF are connected to UAE controller. In HDToolbox you should see both HDF and CF listed.
If the CF card was formatted for PC (i.e. with FAT or NTFS), you first need to clean it. Open a DOS window and enter DiskPart. Use list disk to list all available drives, then select disk n to select the CF card (replace n by the disk number of the CF card) and finally clean to remove all data from it. Only then WinUAE will accept it as empty.
Is it possible to do this under Windows XP? Using diskpart, only my internal harddrive is detected, not my flash card (4GB Transcend). I have UAE 2.3.3 with the ClassicWB (3.0) running on it. I'm trying to set up my flash card for use on an A1200, but when its in the actual A1200 machine it lists my card as CC0: and when I use HDToolBox, it says it can't partition due to being type 7. So back to the PC with a USB Compact Flash reader. I don't know how to wipe the disk using Windows XP. Can you help?
Also worth noting that the card works. Currently its formatted to a single FAT32 partition and mounts in UAE as a PC drive, but yeah. Need to wipe it to partition it to Amiga filesystem. Also, my A1200 is otherwise unexpanded. I noticed your post about not being able to see partitions with lower memory. Any tips to get around this with my 2mb?