In contrast, with the worst case of a partition of 1 to 2Gb in size, a FAT16 formatted drive would use a single 32K cluster to store this 1 byte file, and over the contents of a typical drive, this wastage can result in dozens of megabytes of extra unusable space. FAT32 also overcomes the annoying 2Gb maximum size available to FAT16 partitions, which forces you to divide up drives larger than 2Gb whether you want to or not.
So, opting to use FAT32 will typically result in more drive space being available, as well as the option of using partitions greater than 2Gb in size. Sadly, few things in life are free, and this is at the expense of a slightly larger overhead during file reads and writes, simply due to the more complicated directory structure with lots more potential entries. For this reason, some PC Musicians have carried on with FAT16, particularly on their Windows boot drive, which can nearly always be 2Gb or less.
However, you can force larger cluster sizes with FAT32, either using a command line when reformatting your drive from DOS, or far more elegantly with our old friend Partition Magic. The benefits for huge audio files are that larger clusters mean less read/write operations, and you are also likely to get less fragmentation to take care of. For these reasons, nearly all musicians will benefit from formatting audio-only drives wtih FAT32 and a 32K cluster size.
In the case of Windows 2000 there is another format option. Windows NT used a different file system named NTFS (New Technology File System) to store hard drive data, although it could also recognise the FAT16 formatted drives used by Windows 95. NTFS provides more security for a system that will get used by various people, by keeping multiple copies of its master file table, to protect against corruption and data loss.
Windows 2000 recognises both NTFS and FAT32, and during an upgrade from Windows 95/98 will ask you if you want to convert the partition to NTFS. If you're going to run it alongside Win 95/98 as a multi-booting system you will have to use FAT32, since otherwise your common data be invisible when running the Windows 95/98 partition. Conversely, if you already have an NT 4.0 installation and want a multi-booting system you'll have to choose NTFS, although you should be aware that Win2k upgrades the drive to NTFS version 5. This can still be used from NT4, but its CHKDSK drive error checking utility won't work any more.
If you have no restrictions then most experts agree that NTFS is a better file system than either FAT16 or FAT32, although a few people have found that its hard drive read/write performance under Win2k worse than both NT and 98, especially with older motherboard chipsets. If you're in any doubt about changing the partition type during the install, choose the "No Changes" option, since you can always change your mind afterwards using the CONVERT utility, or with a third-party application like PowerQuest's Partition Magic