Before Win-7, I've never used NTFS and have had no problem formatting a 500 gig drive in FAT-32.
For a storage partition, not an OS partition, FAT-32 does give you more access and control over the drive, even from a DOS boot disk, if necessary. If you're working with large video files you may want to have an NTFS partition for those, as a FAT-32 part. will have a file size limit that you might run into. I keep one NTFS partition just for Video conversions.
But having said all that, Windows XP will run just fine on a FAT-32 partition, but Vista, Win-7 and Win-8 will not.
Regardless of what OS I'm going to put on a drive, or even if I'm just setting it up as a backup drive, I always use my DOS Utilities disk (floppy, CD or Flash Drive) to run "
FDISK" to set up the one or more partitions, and if I want to format that partition, I just use the DOS
Format command.
I use the DOS that came with Windows ME, which is more capable than that which came with Win-98.
I was having all sorts of problems getting Win-8/DP installed on an old HD, till I wiped the disk clean with FDISK, creating just one partition on the 200gig drive, and then Win-8 installed without any more problems.
There is always a way, to do what you want with your computer, whether someone calls it nonsense or not.
Happy Holidays!