FAT32 provides enhancements to the Windows 95 FAT file system designed to efficiently support large hard disks up to 2 Terabytes in size. Large drive support is also promised to appear in the forthcoming Mac OS 8.0.1 to address that system's current 2GB limitations. As mentioned above, the original 16-bit FAT format is a part of all versions of DOS and the original release of Windows 95. With Windows 95 OSR2 and the forthcoming Windows 98, the optional FAT32 file system solves the inefficiency problem on larger drives. We've been using FAT32 for several months and have had no problems or complaints with it.
Larger drives benefit even more.
The upgraded file system is only available on new machines with Windows 95 pre-installed by the manufacturer. To get the most out of your hard drive, you need to understand how data is stored on the disk. When these 16-bit partition sizes exceed 1 gigabyte, the inefficiencies start to become more than a minor annoyance. Wasted space goes up as partition size increases. This is a side effect of the way data is stored on the hard drive.