"Deep in the sea are riches beyond compare.
But if you seek safety, it is on the shore."

Features of Fat 32

FAT32 provides the following enhancements over previous implementations of the FAT tile system:

Supports up to 2 terabytes in size: Compared to 2GB of FAT16, 1000 times more.

Uses space more efficiently: FAT32 uses smaller clusters (e.g. 4k clusters for drives up to 8GB in size), resulting in IO to I 5% more efficient use of disk space relative to large FAT drives. The minimum size for a FAT32 partition is about 260 MB.

More robust: FAT32 has the ability to relocate the root directory and use the backup copy of the FAT instead of the default copy. In addition, the boot record on FAT32 drives has been expanded to include a backup of critical data structures. This means that FAT32 drives are less susceptible to a single point of failure than existing FAT volumes.

More flexible: The root directory of a FAT32 drive is now an ordinary cluster chain, so it can be abnormally large and located anywhere on the drive. In addition, FAT mirroring can be disabled, allowing a copy of the FAT other than the first to be active. These features allow for dynamic re-sizing of FAT32 partitions. Note: while the FAT32 design allows for this compatibility, it is not implemented by Microsoft in the initial release of OSR2.

Technical Implementation
Because of the compatibility considerations described above, the implementation of FAT32 involved very little change to Windows 95. The Major differences between FAT32 and earlier implementations of FAT are as follows:

Two new partition types are defined: OxB and OxC. Both indicate FAT32 volumes; type OxC indicates a FAT32 partition that requires extended INTI3 support (LBA).

The boot record on FAT32 drives requires 2 sectors (due to expansion and addition of fields within the BPB). As a result, the number of reserved sectors on FAT32 drives is higher than on FAT16, typically 32. This expanded reserved area allows two complete copies of the boot record to be stored there, as well as a sector in which free space count and other file system information is stored.

The FAT is now larger, because each entry now takes up 4 bytes and there are typically many more clusters than on FAT16 drives.

The root directory is no longer stored in a fixed location. A pointer to the starting cluster of the root directory is stored in the extended BPB. The on-disk format directory entries is unchanged, except that the two bytes previously reserved for Extended Attributes now contain the high order word of the starting cluster number.

MS-DOS APls that rely on intimate knowledge of the file system layout generally fail on FAT32 drives. For instance, GetDPB (int21 h, function 32h), Int 25/26h Absolute disk read/write, and most of the Int 21 h, function 440Dh IOCTLs will fail on FAT32 drives. New forms of these APls are provided in OEM service release 2 which work on all FAT drives.

Win32 APls are not affected by FAT32, with the exception of one additional API called GetFreeSpaceEx() for determining the true free space on a FAT32 volume.

Notes

Once you convert your hard drive to the FAT32 format, you cannot return to using the FAT16 format unless you repartition and format the FAT32 drive, or use a conversion utility like Partition Magic, but this cannot be 100% reliable.
If you have a compressed drive, or want to compress your drive in the future, you should not convert to FAT32. If you are really short of space use Free-space from Mijenix Corporation. It can selectively compress files or folders.
If you have a removable disk that you use with another operating system, don't convert to FAT32.
Hibernate features (suspend to disk, for example) will not work on a FAT32 drive.
Although most programs are not affected by the conversion from FAT16 to FAT32, some disk utilities that depend on FAT16 do not work with FAT32 drives. Contact your disk utility manufacturer to see if there is an updated version that is compatible with FAT32.
If you convert your hard drive to FAT32, you can no longer use dual boot to run earlier versions of Windows (Windows 95 [Version 4.00.950], Windows NT 3.x, Windows NT 4.0, and Windows 3.x). However, if you are on a network, earlier versions of Windows can still gain access to your FAT32 hard drive through the network.
The minimum size for a FAT32 partition is about 260 MB. However, if you use the Windows98 FAT32 converter, it requires drives to be at least 512 MB in size before they can be converted. This is done to gain maximum performance.