Helping my dad today with some old disks, we realised that in XP Microsoft removed the 720K option from the GUI format tool, and the /F:720 flag is gone from FORMAT on the command line! Fortunately if you specify the tracks and sectors manually it recognises the 720K disk and formats it.
FORMAT A: /T:80 /N:9
I don't have any machines with floppy drives running Vista or 7, but I assume this still works in later versions.
Many thanks for documenting this. I just needed to reformat some scavenged diskettes for use with an old MIDI sequencer, and this tip saved digging out an even more ancient PC than the one I normally use.