MS-DOS introduced FAT16 file system way back in 1981. Originally this file system was designed to handle files on floppy drive. Over years, few minor modifications were made on FAT16 file system so that it could handle hard disks and longer file names which originally had limitation of 8.3 characters.
One of the unique features of FAT 16 is that it is compatible among the numerous Operating systems like Windows 95, Windows 98, Linux and few versions of UNIX. One of the disadvantages of FAT16 is that it has a fixed number of clusters per partition which makes the hard disk bigger. FAT16 also does not support encryption, compression or any advanced security using access to control lists.
FAT32 is just an extension of FAT16 file system which provides a large number of clusters per partition. Originally FAT32 was introduced in Windows 95 Service Pack 2. Limitations of FAT32 are same as that of the FAT16. An important limitation is that number of OS which recognize FAT16 fail to work with FAT32. This won’t be a problem if the user is running FAT32 on a Window XP computer as it shares the drive with other computers on their network.
NTFS file system is completely different system from FAT. It was first introduced with the first version of Windows NT. NTFS file system offers good security, file-by-file compression and even encryption. These files are set up as a default file system for any new installations of Windows XP.
With NTFS volume the users does not need to run a disk recovery every now and then as the NTFS guarantees the consistency of volume by using the standard transaction recovery techniques which makes the job of user much flexible.
Another highlighting feature of NTFS is that it uses the log file and check point information to restore the information in case of system failure. The users can set disk quotes which help in memory management and control the consumption of NTFS volume. The user can convert their FAT16 or FAT32 volumes to NTFS file system at any point but the reverse is not possible.