if we use FAT32 instead NTFS, XP or NT itself gets degraded? it is no matter for me. but if it is in another system, should they be FAT32 too to communicate with Linux machines? I am bit confused
Use a FAT32 partition on dual-boot (XP and Linux) machines where you want to share data between the different operating systems on the same machine. This does not mean that the whole XP system needs to be FAT32 rather than NTFS; use NTFS for the main system partition and create another FAT32 partition for the shared data area.
For sharing data over a network, NTFS is fine; samba on Linux talks to the "samba" server on Windows, which knows how to write to NTFS partitions.
Paul.