| "i was told ages ago by someone on this site that it is recommended that flash drives and external drives me FAT32 to allow more flexability when moving from machine to machine."|
Flash drives are one subject - external hard drives are another.
Flash drives of 2gb or less usually come partitioned using FAT (actually it's FAT16) partitioning - those can be read on any computer, even those that have only a later Dos (e.g. Dos6.x) operating system, if the OS has drivers that can recognize the flash drive. Win ME and above has the drivers built in - for Win 98SE back to the Win 95 original version, you must install drivers.
However, FAT (FAT16) partitioning has an max size limit of ~2.1 gb.
You can use FAT32 partitioning on those if you like - in that case they can only be recognized by Win 95 OSR2 or later (earlier versions of Win 95 use FAT (FAT16 if above a certain size) partitioning, as do the later Dos versions).
Flash drives larger than 2gb usually come partitioned using FAT32 - those can be read by Win 95 OSR2 and up, if the OS has the drivers that can recognize the flash drive.
For the same size of blank partition, FAT (FAT16) partitioning and formatting uses up less partition space than FAT32 partitioning and formatting does, and FAT32 partitioning and formatting takes up less partition space than NTFS partitioning and formatting does. It is not recommended you use NTFS partitioning for partitions 4gb or smaller for that reason, whether it's a flash drive or a hard drive, or whatever.
There are two FAT32 versions for Win 95 and up - the earlier version is used in Win95 OSR2 and up and in Win 98 - the later version is used in Win 98SE and up.
The NTFS version used for 2000 and up is a newer version than was used in earlier Win NT OS versions. It uses 4kb allocation units for all files - a file takes up at least 4kb of partition space, or a multiple of 4kb, no matter what the capacity of the partition is.
FAT32 uses various sizes of allocation units, depending on what size a partition is - e.g. a partition of 16gb to just under 32gb uses 16kb allocation units - partitions smaller than that use smaller allocation units - but for a partition of 32gb and larger, FAT32 uses 32kb allocation units for all files - 8X larger than NTFS does.
Microsoft considers using FAT32 partitioning for partitions larger than 32gb to be more wasteful of drive space, so you are not allowed to use it if you partition in the 2000 OS and up, since smaller files must use at least 32kb of partition space, rather than 4kb for NTFS, and if a larger file is even one byte over a multiple of 32kb, the last allocation unit a larger file uses can waste up to one byte less than 32kb that cannot beused for other data, rather than up to one byte less than 4kb for NTFS.
However, whether FAT32 is more wasteful of partition space depends on what proportion of large files there are on a partition - if the partition has mostly huge files on it, there is very little if any difference between the partition space wasted on FAT32 and NTFS partitions, and FAT32 has the advantage it's partitioning and formatting take up a lot less space than the NTFS partitioning and formatting does.
You can partition any partition larger than 32gb FAT32 if you want to, by using third party programs, such as the free disk preparation programs available on hard drive manufacturer's web sites, or partition manipulation programs such as Partition Magic or a freeware one, or by using an ME CD or Startup floppy disk, or by using a Win 98 or 98SE Startup floppy disk that has the updated version of fdisk installed on it, etc., etc. (You can't use the Win 98 or 98SE CD to do that, or the 98/98SE Startup disks with the original fdisk on them [which is what is installed on them by default] if the partition is larger than 64gb because of bugs in the original 98/98SE fdisk version.)
Some, including myself, think it's a very good idea for at least the partition Windows is installed on to be FAT32, because there are more ways and more free programs you can use that you can fix a FAT32 partition with than you can fix a NTFS partition with when it gets wonky.
It is NOT a good idea to make only one partition on a hard drive that has Windows installed on it, and you DO NOT necessarily have to install most programs that did not come with Windows on the same partition Windows is installed on, which is usually C (if it does not have a brand name system software installation on it; the original hard drive on brand name systems with it's original software installtion on it usually has two partitions, but only one, C, is directly usable by the user).
I usually make the Windows partition FAT32 and a tiny bit less than 32gb on my own larger drives, so the allocation unit is 16kb instead of 32kb.
(32gb is 32,768mb - 32,760 makes it 31.99 gb)
I also make at least two other partitions on drives 80gb or larger that have a Windows partition on them.