From FWB: "Q. Does HDT 2.5 support Mac OS Extended (HFS ) volumes? A. Hard Disk Toolkit version 2.5 is compatible with Mac OS Extended (HFS ) volumes. Both Mac OS Standard and Mac OS Extended HFS volumes using the HDT 2.5 driver operate normally under Mac OS 8.1."
Essentially, to create a Mac OS Extended volume using HDT 2.5, format the disk with HDT and then select the Mac OS Extended format option from the Finder's Erase Disk command (found in the Special menu).
FWB is working on an update to HDT 2.5 that eliminates the need to use the Erase Disk command and provides seamless Mac OS Extended volume support.