The FAT32 file system, originally introduced in Windows 95 Service Pack 2, is really just an extension of the original FAT16 file system that provides for a much larger number of clusters per partition. As such, it greatly improves the overall disk utilization when compared to a FAT16 file system. However, FAT32 shares all of the other limitations of FAT16, and adds an important additional limitation—many operating systems that can recognize FAT16 will not work with FAT32—most notably Windows NT, but also Linux and UNIX as well. Now this isn't a problem if you're running FAT32 on a Windows XP computer and sharing your drive out to other computers on your network—they don't need to know (and generally don't really care) what your underlying file system is.
