A file system is the underlying structure a computer uses to organize data on a hard disk. If you are installing a new hard disk, you need to partition and format
it using a file system before you can begin storing data or programs. In Windows, the three file system options you have to choose from are NTFS, FAT32, and the older and rarely-used FAT (also known as FAT16).
NTFS is the preferred file system for this version of Windows. It has many benefits over the earlier FAT32 file system, including:
The capability to recover from some disk-related errors automatically, which FAT32 cannot.
Improved support for larger hard disks.
Better security because you can use permissions and encryption to restrict access to specific files to approved users.
FAT32, and the lesser-used FAT, were used in earlier versions of Windows operating systems, including Windows 95, Windows 98, and Windows Millennium Edition. FAT32 does not
have the security that NTFS provides, so if you have a FAT32 partition or volume on your computer, any user who has access to your computer can read any file on it. FAT32 also has size limitations. You
cannot create a FAT32 partition greater than 32GB in this version of Windows, and you cannot store a file larger than 4GB on a FAT32 partition.
The main reason to use FAT32 is because you have a computer that will sometimes run Windows 95, Windows 98, or Windows Millennium Edition and at other times run this version of Windows, known as a multiboot configuration. If that is the case, you will need to install the earlier operating system on a FAT32 or FAT partition and ensure that it is a primary partition (one that can host an operating system). Any additional partitions you will need to access when using these earlier versions of Windows must also be formatted with FAT32. These earlier
versions of Windows can access NTFS partitions or volumes over a network, but not on your computer.