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NTFS vs. FAT
FAT and NTFS are the two most commonly used file systems in the PC world. Since many PC users are now starting to discover the benefits of Windows NT and Windows 2000 (when compared to their consumer grade counterparts such as Windows 9x or ME) they are learning that they have an important file system choice to make. They must decide whether to keep using FAT, as many have done for years in other Microsoft operating systems, or to "take the plunge" and go for NTFS. In fact, this may well be the most commonly-asked question associated with NTFS: "should I use FAT or NTFS?"
As with many commonly-asked questions, there are no simple answers. :^) As with other popular "X or Y" questions such as IDE vs. SCSI, the reason that the question exists is that both alternatives fit certain niches and needs. I can't give you a definitive answer regarding which file system you should choose, because I don't know the particulars of your situation. That's the honest answer. Many people aren't satisfied with this, of course... they want me to tell them which is "better". This is a bit like asking which is "better": a mid-sized family sedan or a pick-up truck? A Ferrari or a motorcycle?
Most frequently, the question of NTFS vs. FAT is answered by looking at the advantages and disadvantages of NTFS, and comparing it to the simpler FAT file system. This can be made easier by assessing three general questions:
Again, I cannot answer those questions for you, nor will I endeavor to do so. I would encourage you to read the various pages that describe the various benefits and drawbacks of NTFS, and decide for yourself. The questions above will help you.
The only other rule of thumb that I would use is this one: the larger the organization, or the greater the number of people that will be using a PC, the more likely it is that you will want to use NTFS on it. Even leaving aside the other features of NTFS, the security provisions of that file system make it pretty much a necessity if you are going to set up a server with files shared by many different users and groups. For very small organizations, access control is something that may be dispensable, but for a company of say, 20 or more people, it becomes quite important. Of course, in some medium-sized organizations security may not be required, but those are pretty atypical. For individual PC users, NTFS may well be overkill, depending on how the PC is being used.