Files in Windows XP can be organised on the hard disk in two different ways.
The file system used goes with an individual partition of the disk. You can mix the two types on the same physical drive. The Windows XP operating system is the same, whichever file system is used for its partition, so it is a mistake (and source of confusion) to speak of “a FAT disk reading an NTFS partition.” It is the operating system, not the disk, that does the reading.
Actual files are unaffected by which file system they are on; that is merely a matter of a method of storage. An analogy would be letters stored in an office. They might be in box-files on shelves (FAT) or in suspended folders in file cabinets (NTFS); but the letters themselves would be unaffected by the choice of which way to store them, and could be moved from one storage place to the other. Similarly, files can be moved between folders on an NTFS partition and folders on a FAT partition, or across a network to another machine that might not even be running Windows.
EXAMPLE: Consider the downloading to your computer of a file through a link on a web page. You click on the link, and the file is copied across the Internet and stored on your hard drive. If you download the file from this present site, the file is stored on a computer running Unix, which uses neither FAT nor NTFS. The file itself is not affected when it is copied from a Windows computer to the Unix-based server, or copied from that server to your Windows-based computer.
However, if a machine has two different operating systems on it, dual booted, they may not both be able to read both types of partition. DOS (including an Emergency Startup boot floppy), Windows 95/98, and Windows ME cannot handle NTFS (without third party assistance). Early versions of Windows NT cannot handle FAT32, only FAT16. So, if you have such a mixed environment, any communal files must be held on a partition of a type that both operating systems can understand — meaning, usually, a FAT32 partition. (See the article Planning Your Partitions on this site, under the section “Multiple Operating Systems,” for a table of which file system each recent version of Windows can use and understand.)
There are three considerations that affect which file system should be chosen for any partition:
Also, of course, in a dual boot system, there may be the overriding need to use FAT on a partition so that it can also be read from, say, Windows 98.
Leaving matters of access control and dual use aside, as partition sizes grow, the case for NTFS gets stronger. Microsoft definitely recommends NTFS for partitions larger than 32 GB — to the extent that Windows XP will not format a FAT partition above that size. However, with smaller sizes, FAT is likely to be more efficient — certainly below 4 GB, and probably below 8 GB. I suggest that NTFS should be used for partitions of 16 GB or above, where the FAT 32 cluster size goes up to 16 KB, the intermediate region (that is, partitions between 8 and 16 GB in size) being largely a matter of taste.
Ideally, a disk is initially formatted in the file system which is to be used permanently — NTFS, for example, can then put the Master File Table in its optimal location in the middle of the partition.
However, on an upgrade of an existing system, the file system is left as it is. For example, an upgraded Windows 98 system will be on FAT32. Also, some computer makers ship new computers with all partitions formatted as FAT32. These can be converted to NTFS if that seems more suitable to your needs. If you use the method described here, the result will be nearly as satisfactory as if a fresh format to NTFS had been done.
But this conversion is a one-way process. Windows XP provides a native tool for converting FAT to NTFS, but no tool for converting NTFS to FAT. It may be possible to convert NTFS to FAT using Partition Magic 7.01, but the result is uncertain. It you attempt it, it is essential that you first decrypt all encrypted files, or they will be forever inaccessible. (For this reason, Partition Magic will stop if it finds one.) If it is a new machine, too, be sure that your warranty will not be compromised by doing a file system conversion.
A further aspect that needs caution is that the conversion may result in the NTFS permissions on the partition and its folders being not the simple general access that might be expected. It is certainly important that the conversion be done when logged in as an Administrator.
Will a backup or image made from NTFS remain NTFS if I restore to a newly formatted partition?
This depends on the approach of the particular backup program you use. It may make an exact image of the partition, including the file system’s structures, in which case the restored partition will be exactly as the original. (Indeed, any format of the drive before restoring the drive image not only is unnecessary, but all that it accomplishes will be overwritten when you restore the image.) Or, the software may work on a file-by-file basis, in which case the files themselves will be restored — to whatever file system has been used in formatting the partition to which you restore them. But, again, note that a file-by-file restore from a backup of NTFS to a FAT partition will result in encrypted files being unreadable, because there is no way to decrypt them on FAT!