The file system which works with windows xp are as first shown here,
FAT refers to file allocation table.
NTFS refers to New Technology File System
FAT 16:
This file system is introduced on 1981 along with DOS. Its main function is to operate with Floppy drive files. afterwards it is made to work with hard drives. The main advantage of this file system is that we can use all operating system ranging from 95/98/ME, OS/2, Linux, Unix, etc. The main disadvantage of it is clusters that is found in it. so it takes more hard disk space.
FAT 32:
It is introduced with windows 95 service pack 2. It is called as extension of FAT 16 file system. It uses clusters for drives and so it uses less disk space than FAT 16 file system. since it is considered better than that of FAT 16, it has some demerits of FAT 16 file system. Some operating system requires FAT 16 file system and these operating system does not works with this file system.
NTFS:
It is introduced with Windows NT. It is a newer technology than FAT file system. It has got improved file protection techniques. Individual compression for each file is available. Encryption is also possible. It has much greater technology than FAT system. we can convert an FAT system into NTFS and we cannot convert NTFS to FAT 16 or FAT 32. FAT system doesn't offer any file protection technique.