Some Info for you copy & pasted regarding Fat32 and NTFS
Can I convert between NTFS and FAT? How do I remove NTFS?
Win2k/XP comes with the "convert" command-line utility to go from FAT32 to NTFS; this conversion tends to give the volume greater fragmentation of system areas and non-optimal cluster sizes (original size maintained).
Windows doesn't provide for conversion from NTFS to FAT; PartitionMagic from PowerQuest will do it.
Removing NTFS partitions by formatting is explained in this Microsoft KB article Q314052
What are the advantages of FAT over NTFS?
Performs faster on volumes ~10GB and less.
Works well with small disk cache and system cache (less than 96MB systems).
What are the disadvantages of FAT?
Gets slower as the number of files on a partition increases.
Slows as volume size increases, because drive must constantly reference the file allocation table at the beginning of the volume.
Tends to highly fragment files.
What are the advantages of NTFS over FAT?
Is the native file system for WinNT/2k/XP.
Allows indexing which improves file searching (mostly, faster); causes slight performance hit (can turn off).
Has better security -- such as file-wise encryption (not supported by WinXP home) and per-user access rules (you can stop your wife from seeing the porn folder!)
Supports user quotas (prevent the tykes from downloading too many mp3s)
Has file-wise compression.
Is journaled, decreasing data loss (ScanDisk at start up unnecessary).
Uses Unicode (allows foreign and extended character) file names and natively supports long file names.
Supports larger files than FAT (greater than 4GB).
Allows larger volume sizes (greater than 1TB) There is talk about a theoretical limit of 16 Exabytes, and up to 2 Terabytes.
Supported format on dynamic disks (no dynamic disks on WinXP Home).
Works well with large cache (greater than 96MB systems).
Performs better on volumes ~20GB and more.
Is more space-efficient on large volumes (greater than 8GB).
Resistant to fragmentation.
What are the disadvantages of NTFS?
Suffers with small cache (less than 96MB systems).
Suffers with slow disks and controllers.
Is less space-efficient on small volumes (less than 4GB).
Should I use FAT or NTFS? Which is faster?
Some people report FAT is faster than NTFS; others report that NTFS is faster than FAT. Compare your system specs and needs with the advantages and disadvantages of each file system.
Comfort level is important -- if you are apprehensive about using NTFS, then do not put your important files on it! You can always convert from FAT to NTFS later. Try NTFS on a spare partition first, if possible.