History

• The FAT file system was introduced in 1981 when Microsoft released MS-DOS version 1.0. That system, the FAT12 file system, was designed to allow for partitions of up to 8 MB. It was later updated in 1984 to the FAT16 system, which allowed for larger partitions. FAT was updated one more time to FAT32 when Microsoft introduced Windows 95 Service Pack 2, an upgrade of the original Windows 95 (Windows 98 was the first to include FAT32 without an upgrade).
  
  

Clusters

• FAT file systems are based on clusters. These are pieces of the hard drive that the operating system demarcates for file storage. FAT16 used cluster sizes as small as 8KB, while the newer FAT32 allows for clusters as small as 4KB. This means that you can fit more material on a hard drive. The way it works is that if you have a 4KB file and an 8KB file, under FAT16, you would use 16KB of space, since the smallest cluster was 8KB. However, under FAT32, you would use only 12KB for the same two files, because the cluster size is just 4KB; so you could have the 4KB file in one cluster and the 8KB file in two clusters. This saves space, allowing more information to be packed into a single partition.
  
  

Root Directory

• FAT16 allowed as many as 512 files in the root directory of a partition (i.e. "C:\" as opposed to "C:\Windows"). FAT32 offers the option for double the amount of files in the root directory.
  
  

Other Limitations

• Other than the changes above, FAT32 offered the same limitations as FAT16, including the fact that clusters could not be larger than 64KB, and not more than 65,527 clusters could exist on a single partition.
  
  

Non Journaling File System

• Unlike NTFS, which was introduced with Windows NT and later incorporated into Windows XP, FAT, in all its incarnations, is a non-journaling system. This means that it does not keep track of changes made to the hard drive, like Windows XP does with its "System Restore" feature.