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Windows 95B and 95C (OEM SR 2.x)
Windows 95 was a big success for Microsoft, and I would say this was for good reason: while certainly sharing many of the flaws associated with other Microsoft operating systems, Windows 95 was a significant improvement over Windows 3.x in virtually every way. However, Microsoft developed a problem with the operating system as time went on, specifically related to the file systems it supported. As hard disks grew in size, they began to approach the maximum size allowed by a FAT16 partition. This meant that PC makers were forced to divide the drives in their new systems into multiple partitions, which was extra work and which some customers didn't like. People buying new hard disks also had a similar problem. Since hard disks were only going to keep getting bigger, Microsoft had to do "something".
That "something" came in the form of the FAT32 file system, which allows for much larger single partitions than the older 16-bit version of FAT. FAT32 support was included in an updated version of Windows 95 that Microsoft released in 1996, along with some other new features. In a move that was controversial at the time, Microsoft decided to make these new operating systems available only to OEMs (original equipment manufacturers, in this case PC and PC component makers)--no retail version was ever created. The new version of Windows 95 was called "Windows 95 OEM Service Release 2", which is usually abbreviated to "Windows 95 OEM SR2" or "Windows 95 OSR2". It is also sometimes called "Windows 95B".
OSR2 was never sold to the public at retail, so if you wanted to use the newer version with FAT32 support you had to either buy a new PC, motherboard or hard disk, or buy a "gray market" copy from a retailer willing to break Microsoft's rules (and doing this was quite popular in 1996 and 1997). Microsoft never really explained why they refused to make FAT32 available to the unwashed masses, but speculation is that they didn't want to expend the energy involved in doing a full quality assurance cycle to ensure that it would work with all the hardware in use at the time. By restricting it to OEMs and new systems, they didn't have to worry as much about whether OSR2 would work with all older hardware and software, and could even push some of the validation effort onto the OEMs themselves.
Between 1996 and 1997, Microsoft actually released three slightly different variants of Windows 95 OSR2:
Note that all of these are identical, except as noted, and they all support the FAT12, FAT16, VFAT and FAT32 file systems.
Well, I included all this verbiage so that you would understand all of the various issues surrounding FAT32 support under Windows 95. The matter of FAT32 not being available at retail became a non-issue when Microsoft introduced Windows 98, which all but removed Windows 95 OSR 2.x from the market. Of course, millions of PCs are still running this operating system. If you have the older Windows 95 (now called "Windows 95A") and want FAT32 you should upgrade to Windows 98 or Windows ME, not Windows 95 OSR 2.x (unless there is a specific reason why you prefer Windows 95 of course!)