Fat32 and NTFS were created of keeping track of all the files in a hard disk. Fat(File Allocation System) created by Bill Gates and Marc McDonald, is the older of the two and has gone through a lot of changes since its first appearance in the year 1977. The number denotes the number of bits needed to keep track of the files. Fat16 has been the standard for quite sometime until hard disk with capacities greater than 4GB arrived in the market, at which point Fat32 was created.
On the other hand the NTFS file system was born from the HPFS file system used by OS/2, a collaboration of IBM and microsoft. When the deal did not push through, some of the features in HPFS appeared in NTFS when it appeared for the Windows NT platform. It has since been developed and appears in more recent Windows version like XP, Vista, and the soon to be released Windows 7. Microsoft holds the patent to NTFS and thus isn’t divulging any details with regards to the file system making NTFS drives only readable to Windows systems for a long time, though there are already some linux implementations that are capable of accessing NTFS drives but without its prominent features.
Fat32 is a very simplistic and fluff free system that is also very documented. It doesn’t really do much of anything aside from keeping track of where the files are located. That’s why it has become the file system of choice for most portable storage mediums like flash drives, mp3 players, and memory cards.
The NTFS filesystem is quite the opposite, offering multiple enhancements that doesn’t only improve its performance but also its security. One of which is transparent file compression which automatically compresses the file when it is being written to the disk. This could potentially free up some disk space but files could take some time to load. Another one is disk quotas where a system administrator can specify how much of the disk a certain user can use.
Choosing between NTFS and FAT32 filesystems is a relatively easy task. Simply put, NTFS is the better option when you want to deploy it on a windows computer system. Not only because of the speed improvements but also because of its multiple features. It is not advisable though for portable media since most devices and other operating systems have a difficulty or are outright unable to access NTFS drives.