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File Systems
What makes up the file system?
what are the differences between FAT16, FAT32 and NTFS?
This page will go over the basics of each file system used by
Microsoft.
What is the file system?
A basic way of thinking of a hard disk is like this:
Imagine a open field that is then paved with asphalt and then
lines are drawn to make parking spaces. The open field is the
hard disk itself, as it comes from the factory. Then when you do
a low-level format, you smooth out the field with asphalt. A
low-level format is when a special program or sometimes a device
writes 0s to the entire disk. (THIS IS ALREADY
DONE AT THE FACTORY FOR YOU) Now the operating system
comes along and has to store data on the disk, but needs to know
how to organize it and find it. The operating system paints the
lines and then numbers the parking spaces. There are many
different types of file systems in use today. MS-DOS and Windows
3.1 (and Windows for Workgroups) only support FAT16, Windows
95/98 & Me Supports 2 file systems: FAT16 and FAT32. While
Windows NT supports 4 file systems: FAT16, NTFS, HPFS, and
CDFS, and now Windows 2000 (aka NT5) supports all 5..
The Hard Disk Drive:
What is the disk drive? A disk drive is basically a thin metal
disk or piece of thin film that spins at a very high speed. The
surface has to be extremely smooth and there must not be any dust
or foreign particles in the drive, which is why it is sealed up
very well. To read and write information to the drive, heads
mounted on arms move across the drive like a record player
stylus. The disk is then divided up into tracks, heads, and
sectors. Most hard disks have 512 bytes in one sector.
FAT16
Why is it called FAT? FAT stands for File Allocation Table. All
the file locations are contained in 2 tables, one is the working
FAT and the other is the backup FAT. The FAT points to the
cluster that the file starts at. A cluster made up of one or more
sectors, usually 512 bytes in size. Depending on the size of the
drive, the cluster size changes. The problem? Let's say you have
a file that is 1 KB in size. You save it on a disk that has 2 KB
clusters. You waste the other 1 KB in the cluster because a
cluster can only be occupied by one file. But what if you have a
drive that is bigger than 1024 MB, and it has 32 KB clusters? You
loose 31 KB!!! So on a drive with a lot of small files that is
big does not use it's space efficiently. Another problem that
comes about is fragmentation. When a file is greater then the
cluster size, it has to be split up in to multiple pieces.
Sometimes it is possible to place each unit next to each other
sequentially, so that when the file is read, the disk head
doesn't have to move much to read the entire file. But if the
pieces are far from each other on the disk, the heads have to
move to each track which slows down the file read.

FAT32
To solve the problem with the fact that the largest volume size
for FAT16 can be 2 GB and the wasted space because the cluster
sizes are large, Microsoft introduced FAT32. FAT32 was added to
Windows 95 OSR2 (aka, B) but OSR2 only comes in the OEM version,
not the upgrade version (unless you know a secret to get around
it!!!). It is also included in Windows 98, with a converter.
FAT32 can handle up to 2 TB (tera-bytes). The other advantage is
that on smaller drives, space is used more efficiently, a 2 GB
partition with 32 KB clusters would now have 4 KB clusters,
reducing the space wasted. FAT32 Problems: The only problem with
FAT32 is incompatibility with older DOS programs and applications
that depended on FAT16, such as disk utilities.

NT 4.0 does NOT support FAT32 in any
way. This is extremely important to consider when creating a
dual-boot system,
The C: drive must be FAT16 or NTFS. Windows 2000 (aka NT 5.0) now
supports FAT32. And there are Third-party drivers to allow you to
read, But not write, to FAT32 volumes under NT.
NTFS
NTFS stands for NT File System . Only
supported by Windows NT, it is a far superior file system
compared to FAT16 and FAT32. NTFS adds security and POSIX
compatibility, and higher fault-tolerance. It also is very
efficient because of the cluster sizes, and you can actually
format a volume with whatever cluster size you want. It can
handle volumes up to 16 exabytes, or roughly 18.5 x 10นบ bytes, which is pretty big! The
current cluster sizes however limit it to 2 TB, but it is
expected that newer versions of NTFS will support larger cluster
sizes. All file data is stored in the Master File Table (MFT)
which includes file cluster locations, security attributes and
file names up to 255 characters. It keeps a transaction log for
recoverability - file operations that have not occurred are still
logged so if the system goes down, the file system can be easily
updated. It I/O performance is much better than FAT16, and the
number of files in a directory are not limited (256
files/directories in FAT16).

Source: PC Today, September 1997 (Updated October 2000 with Windows 2000 information)
Also See:
Hard Drive Preperation Guide ~ A Guide to Hard Drive Preperation & Low-Level Format.
FAT32, FDISK & FORMAT Guide ~ Notes on usage
FDISK Messages with Windows 98 ~ Messages you will see when using FDISK