|Windows 2000 and up default to showing you the NTFS choice when you're making a new partition larger than 4gb, and they do not offer the choice of using FAT32 for partitions larger than exactly 32.0gb - 32,768mb - due to Microsoft's wishes - they consider FAT32 partitions to be more wasteful of drive space for partitions larger than that.|
However, you can use third party programs to make a FAT32 partition larger than exactly 32.0gb no problem, and if you have a lot of huge files on a partition, there isn't much if any difference in the amount of drive space that is wasted (that is "slack" space that can't be used for data).
FAT32 has one glaring disadvantage - no file can be larger than 4gb - e.g.a huge movie file may be larger than that.
NTFS has one glaring disadvantage - it has only one file allocation table, the MFT - FAT32 has two - when there's something wrong with the first one the second one often has nothing wrong with it and can be copied to replace the first one.
The NTFS versions used by 2000 and up use 4kb allocation units no matter what the size of the partition is - the minimum drive space a file can occupy is 4kb, or a multiple of 4kb (4,096 bytes).
FAT32 uses various sizes of allocation units depending on the size of the partition, starting at 4kb - it uses 32kb (32,768 bytes) allocation units for all partitions exactly 32.0gb (32,768mb) or larger.
There are a small number of programs that are optimized to be used on NTFS partitions.
E.g. Media Center in the XP MCE versions, and I assume Media Center in Vista and Windows 7 versions that have it, will display a nag message if you specify a location for storing Recordings of TV programs or video that's on a FAT32 partition rather than a NTFS partition.
The Recordings still play when they're on a FAT32 partition, but not quite as well as they do when they're on a NTFS partition.
You DO NOT have to install everything that did not come with Windows on the partition Windows is installed on, if you have more than one partition on the computer.
Instead of choosing the default Express or similar installation choice, you can usually choose a Custom choice or similar , or just change the drive letter at the beginning of the location it wants to install the program to, to install it on another partition. In that case the vast majority of the data is installed on the other partition, only a little of it is installed on the Windows partition, and after that, usually only your personal data for that program is stored on the Windows partition.
I have often made a FAT32 Windows partition that is slightly under exactly 32.0gb (under 32,768mb) so that it's allocation unit size is 16kb rather than 32kb, and made at least one other partition on the single drive to install some of my programs on and to have another place for storing data I don't want to lose if I ever need to install Windows from scratch