It is asking you to Format because Windows detects no file system.

Formatting creates a file system. Without a file system Windows has nothing to work with.

If this drive had a Windows file system on it then either some process removed it or else the drive is mechanically faulty.

You can run a diagnostic on the drive. Most manufacturers have diagnostics available on their web sites for download to floppy or CD.

If your data was very valuable you might consider professional help although that will be an expensive route to take.

I noticed that under free space it reads 31.5 gb, and this is an 80gb hard drive. Does that mean anything?

Well it should mean that nearly 50GB is Used.

But again if Windows doesn't recognize the File System then Windows has no idea what is there.