Advantages of NTFS | Microsoft Corporation Staff, IT Professional Staff - Microsoft Windows 2000 Server Operations Guide

It is recommended that you format all Windows 2000 partitions with NTFS except multiple-boot configurations where non-Windows 2000 and non-Windows NT startups are necessary.

Formatting your Windows 2000 partitions with NTFS instead of FAT allows you to use features that are available only on NTFS. These include:

Recoverability The recoverability designed into NTFS is such that a user should seldom have to run a disk repair program on an NTFS volume. NTFS guarantees the consistency of the volume by using standard transaction logging and recovery techniques. In the event of a system failure, NTFS uses its log file and checkpoint information to automatically restore the consistency of the file system. For more information about recovering your system, restoring data, and creating an emergency repair disk (ERD), see "Repair, Recovery, and Restore" in this book.

Compression Windows 2000 supports compression on an individual file basis for NTFS volumes. Files that are compressed on an NTFS volume can be read and written by any Windows-based application without first being decompressed by another program. Decompression happens automatically during the read of the file. The file is compressed again when it is closed or saved.

In addition, formatting your volumes with NTFS instead of FAT16 or FAT32 provides the following advantages:

There are some Windows 2000 operating system features that require NTFS.
Faster access speed. NTFS minimizes the number of disk accesses required to find a file.
File and folder security. On NTFS volumes, you can set file permissions on files and folders that specify which groups and users have access to them, and what level of access is permitted. NTFS file and folder permissions apply both to users working at the computer where the file is stored and to users accessing the file over the network when the file is in a shared folder. With NTFS you can also set share permissions that operate on shared folders in combination with file and folder permissions.
Windows 2000 can format volumes up to 2 terabytes in size with NTFS.
The boot sector is backed up to a sector at the end of the volume.
NTFS supports a native encryption system called Encrypting File System (EFS), using public-key security to prevent unauthorized access to file contents.
NTFS functionality can be extended by using reparse points, enabling new features such as volume mount points.
Disk quotas can be set, limiting the amount of space users can consume on an NTFS volume.

Disadvantages of NTFS

While NTFS is the recommended file system for users of Windows 2000, it is not appropriate in all circumstances. Disadvantages of NTFS include:

NTFS volumes are not accessible in MS-DOS, Windows 95, and Windows 98. Due to upgrades made to NTFS in Windows 2000, the advanced features of the Windows 2000 implementation of NTFS are not available in Windows NT 4.0 and earlier.
When very small volumes contain mostly small files, the overhead of managing NTFS may cause a slight performance drop in comparison to FAT.

Formatting the System Partition in Multiple-Boot Configurations

If you want to start another operating system, such as Windows 95, Windows 98, Windows for Workgroups, or MS-DOS, use FAT for your system partition and the boot partitions for the other operating systems. You can use NTFS for your Windows 2000 boot partition and other volumes on the computer, as long as those volumes will not be accessed by an operating system other than Windows 2000.