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Just to add my 2 cents worth...
NTFS is a more efficient file system as it uses smaller cluster sizes than FAT32. In addition, you are able to partition a large hard drive (over 32 gigs) as one partition. FAT32 won't support single partitions over 32 gigs (I believe it's 32...it's somewhere close to that). With the low cost of hard drives, this may be a big bonus.
I've just recently upgraded from FAT32 to NTFS (I just installed a 40 gig HD that I wanted as a single partition). I don't notice any major speed or reliability differences between the two. Win2K in general under either file system is very stable on my systems.
Scott
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Somewhat related question: Does the choice of file systems affect the speed at which other client computers can access it?
I have a 2000 machine setup as a sort of test server, and lately I've been testing a program called TrackIt, a help desk app that runs over SQL server. One of the things we've noticed is that Win98 machines trying to run the TrackIt client on the box seem to have very slow performance. 2000 clients don't seem to have this problem. The test server is setup for NTFS, and I'm wondering if NTFS might be a problem for 98 machines?
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Or, maybe the Trackit client just runs better on the W2K OS? The file system should be completely transparent across the net.