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NTFS or FAT what should be the choice?

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For the WinXP, you'll want to use NTFS for performance. However, you don't want to format it before the install. Let the install do it. Just create the partitions and install it in the first one. After installation, and after you've got your anti-virus and all the XP updates/patches installed, let WinXP format the remaining partitions that you want to use for data, again using NTFS for performance. There are plenty of tools available to recover data off of an NTFS partition. Don't format, or even assign a drive letter, any partition you wish to install other OS's on.