File System Dilemma: What's the Real Story?
Those who are new to Windows XP have asking for advice about choosing a file system. If you've been using Windows 9x/ME in the past, should you stick with the familiar FAT32 file system or switch to NTFS (the native file system for Windows NT, 2000 and XP)? Well, there's no "one size fits all" answer, but I'll talk about the advantages and disadvantages of both.
NTFS was designed to be more reliable, stable and secure than the FAT (File Allocation Table) file systems. If you're running XP Pro, there are many advantages to using NTFS: you can set access permissions on files to protect them from unauthorized users, you can use EFS to encrypt files, you can set disk quotas to limit the amount of space on the hard disk each user can use, and you can compress data on a file-by-file basis. You lose some of these features if you're using XP Home Edition, as it doesn't support file encryption or disk quotas. Generally, however, Microsoft recommends using NTFS. One reason is that NTFS supports "hot fixing," which means it can repair disk problems on the fly, transparently to the user.
There are a couple of reasons not to use NTFS, though. If you're dual booting with Windows 9x/ME and you want to be able to access a partition from the older operating system, you'll need to format it with NTFS. 9x/ME can't "see" NTFS partitions. Also, if your disk is small, FAT32 will perform more efficiently than NTFS.
XP also supports the much older FAT16 file system. If you're dual booting with MS-DOS/Windows 3.x, Windows 95a, or non-Microsoft operating systems like OS/2 or Linux, you'll have to use FAT16 for any partition that needs to be accessible to those operating systems. Remember that you can format different partitions in different file systems, though. For instance, you can format C: in FAT16 and install MS-DOS on it, and format another partition (for example, E

in NTFS and install XP there.
If you choose FAT/FAT32 initially, you can convert to NTFS later without losing any data. If you do convert your FAT partitions to NTFS, be sure it's what you want to do. You can't convert back to FAT16 or FAT32 without formatting the disk and wiping out the data that's stored there.
Personally, I love the reliability and features of NTFS and use it whenever possible. Although dual booting has its uses, I find that even when I have multiple operating systems installed, I spend all my time in Windows XP, and I don't like the security risks associated with a dual boot configuration.
jonjontheMighty