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FAT has the huge advantage of data recovery. For example delete something mistakenly with FAT, as long as you don't overwrite it you can recover it. NTFS is much more difficult to work with.
With Win2k you can boot into the recovery console on the CD and access NTFS partitions, something that previously could only be done with 3rd party software.....so the accessibility of NTFS isn't so bad these days.
NTFS manages space just as well or better than any FAT system. FAT32 is far superior for LARGE volumes than FAT16 because it's capable of larger volumes, but FAT32 actually uses space LESS efficiently for small volumes or small files. If you write a bunch of tiny files to a FAT32 partition it'll fill up much faster than FAT16.
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