All good points.
Again, in performance terms I don't think you will see a difference. In therory, NTFS is less likely to be corrupted that FAT32, although it is also harder to recover from if it does get corrupted. In theory, NTFS manages files on very large dives better. However I have one 120 gig drive formated FAT32 and it's working fine.
Ola's has a good point, if you ever want to duel-boot, it's best to keep things FAT32. I have one recording rig limited to Win98 - no working hardware drivers past Win9X for the sound card. Sometime soon I'm going to set it up duel-boot with Win 2000, and I'll want to keep it FAT32.
However - I might add that in a prior post, I piut up a link to a shareware driver that lets Win98/ME read NTFS partitions. I now have it on all my Win98 boot floppies. I like to boot from floppy in order to run Symantec Ghost to make disk backups. This driver now means I can run Ghost for a boot floppy (basicly DOS) and still read & copy NTFS partitions. The read-only version of the driver is free, the read-write costs some $$ I think it's called NTFSDOS, I don't have the link handy, but like I said its in an earlier post.