NTFS

Using FAT32 shouldn't be a problem. NTFS is more powerful than FAT or FAT32, and includes features required for hosting Active Directory as well as other important security features. You can use features such as Active Directory and domain-based security only by choosing NTFS as your file system.

Whether a partition is formatted with NTFS or converted using the convert command, NTFS is the better choice of file system.

In order to maintain access control on files and folders and support limited accounts, you must use NTFS. If you use FAT32, all users will have access to all files on your hard drive, regardless of their account type (administrator, limited, or standard.)

NTFS is the file system that works best with large disks.(The next best file system for large disks is FAT32.)

There is one situation in which you might want to choose FAT or FAT32 as your file system. If it is necessary to have a computer that will sometimes run an earlier version of Windows and other times run Windows XP, you will need to have a FAT or FAT32 partition as the primary (or startup) partition on the hard disk. Most earlier versions of Windows cannot access a partition if it uses the latest version of NTFS. The two exceptions are Windows 2000 and Windows NT 4.0 with Service Pack 4 or later. Windows NT 4.0 with Service Pack 4 or later has access to partitions with the latest version of NTFS, but with some limitations: It cannot access files that have been stored using NTFS features that did not exist when Windows NT 4.0 was released.

Here is a link to a Microsoft page that should answer all of your questions.

http://tinyurl.com/59ta

NT is the only version of Windows that cannot be installed on a FAT volume.

Personally, unless you have small hard drives, I would questionwhy they want to use FAT32.
The only advantage to using FAT32, is that you can easily access the files on a drive from a DOS boot.
Even using NTSF, you can get a utility from www.systeminternals.com that allows you to access a NTSF volume from DOS.

Chas

Why do they want you to use FAT32 in the first place?

If you're using a dual-boot configuration (using both Win2K/XP and another operating system on the same computer), you may not be able to gain access to files on NTFS partitions from the other operating system on your computer. For this reason, you should probably use FAT32 or FAT if you want a dual-boot configuration. The NTFS used by Win2K/XP is not compatible with the version used by Windows NT4. There are programmes available that will make NTFS partitions accessible under Windows 98/ME such as NTFS for Win98 and NTFSDOS Professsional Edition.
Note that FDISK in Win98 has troubles with drives greater than 64GB.

Limitations of FAT32 File System: http://support.microsoft.com/default.aspx?scid=kb;EN-US;q184006

Features available on NTFS Volumes:
* File and Folder Permissions
* Encryption
* Disk Quotas
* File Compression
* Mounted Drives
* Hard Links
* Distributed Link Tracking
* Sparse Files
* Multiple Data Streams
* POSIX Compliance
* NTFS Change Journal
* Indexing Service

Since you need to remove XP anyhow, you are looking at fresh installations on ALL of these systems.

Backup any user files, settings, and registration codes.
Also, create a hardware list, and download the latest W2K drivers.

Create a W2K startup disk.

Boot from the W2K startup disk.
Run fdisk, and delete the Primary NTSF partition.
Run fidsk again, (or boot off the W2K CD)
and create a new Primary partition.
Re-boot, and format the partition as a FAT32 volume.

There is NO easy way to remove XP, and install W2K, that will leave installed applications and drivers in place.

If you look at each PC as a fresh clean box, you are simply installing W2K onto a new PC with the drive formatted as a FAT32 volume.

Chas

NTFS is more stable and realiable than FAT32.
If you however must convert (for whatever reason) to FAT32, here is what can be done:
If you are doing a clean install (formating hard drive) then run the Setup from the Windows 2K CD, when it shows you the partitions hit D for Delete and follow instructions on recreating it using FAT.
If you have to do it on live Partitions (you are not formating them) then you will have to use a 3rd Party program like Partition Magic from Power Quest.