Earlier versions of Windows operating systems used the FAT (File Allocation Table) and FAT32 (similar to FAT, but for larger disk volumes, as well as other features) file systems. Beginning with Windows NT, the NTFS file system enabled a more secure file system. FAT and FAT32 don't provide the mechanisms to store security attributes, such as access control lists (ACLs), for files or directories, as NTFS does.
The main benefit of using NTFS is that it does allow you to store a lot more information about a file or a directory. When you use the NTFS file system to format a disk, you can apply user-level security permissions on individual files or directories. You can still create file shares using Windows sever operating systems, but NTFS allows you to further define which files/directories a user can access when using the file share. For an environment that requires a high degree of security, the NTFS partition is the choice to make. Additionally, the Windows 2000 and Server 2003 operating systems allow for other features that make NTFS a more secure choice, including the capability to encrypt and decrypt data on-the-fly when storing or retrieving it from disk. You can also choose to compress data on files so that less disk space is used to store files.
For either of these options, just right-click on a folder and select the properties page from the menu that appears. You'll see an Advanced button on the General tab. After clicking that button, you'll see two important check boxes. The first is Compress Contents to Save Disk Space. The second is Encrypt Contents to Secure Data. Select either or both of these check boxes to enable that feature for the folder.
The only reason to format a disk using FAT or FAT32 is if you are going to dual-boot the computer, and one of the earlier operating systems (such as Windows 9x) will be used. This is because Windows 9x systems are not capable of using an NTFS partition. You can create one partition and format it using FAT, and create additional partitions using NTFS for Windows NT and later operating systems, such as Windows 2000, Server 2003, and XP. However, this sort of dual-boot setup should be used only in an environment where security is not an important issue, such as a standalone computer (one not connected to a network). This is because a FAT partition does not let you set file or directory partitions and does not support encryption.
Another example is in your home, where you don't have such strict security requirements. For example, you might need to use an older software application that will not run under newer Windows operating systems. Even then, if you are connected to the Internet, you should consider the implications of using FAT or FAT32 on a home computer because many hackers regularly scan IP addresses looking for vulnerable systems. If you stay online for extended periods browsing the Internet—or if you're online all the time using a broadband connection such as a cable or DSL modem, then a FAT- based disk is wide open for planting a Trojan horse and other malicious programs. If you use NTFS instead, and set up your user accounts correctly, you can potentially head off this sort of problem. This is because on NTFS partitions you can set permissions for every file or directory on a one-by-one basis.
Single computers and small LANs typically use an out-of-the-box firewall solution, such as a DSL/cable router, which can offer some degree of protection, such as Network Address Translation (NAT). However, by applying permissions on an NTFS formatted disk, you can further enhance your security.
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