Windows XP Installation on FAT32 Partitions Larger than 32GB

As you probably know already, Windows 2000, XP and Windows Server 2003 have built-in support for FAT32-formatted partitions . Although these operating systems can read, write and boot from FAT32 partitions, Windows XP and Windows Server 2003 have a maximum size limit of 32GB for creating such partitions.

The above paragraph means that you CAN use any FAT32 partition you want, no matter it's size, however you CANNOT create FAT32 partitions larger than 32GB in size.
Also, Windows 2000, XP and Windows Server 2003 do NOT have a native utility that can be used to convert FAT16 partitions to FAT32.

There is a way to trick Windows 2000, XP or Windows Server 2003 into using FAT32 partitions bigger then 32GB. Here is how you do it:

• Get a Win98 boot disk.
• Boot from boot disk and run Fdisk.
• Partition the drive to what size you want up to 120GB.
• Reboot the computer off of the Win98 boot disk.
• Format the drive.
• Boot the computer off of the Windows 2000, XP or Windows Server 2003 CD.
• Proceed to install Windows.
• When Setup asks you what partition to install to choose the disk you just formatted it will give you several option dealing with NTFS. Don't make any changes and choose the last option, which is to install the OS to the current drive without making any changes. Setup will proceed to install normally and you will have Windows 2000, XP or Windows Server 2003 installed to a fully functional FAT32 Partition greater than 32GB.

As stated above, remember that Windows 2000, XP and Windows Server 2003 can use larger than 32GB partitions, but Microsoft intentionally limited the Fdisk portion in Windows in order to push people to use NTFS instead.

Via: petri.co.il/install_windows_xp_on_large_fat32_partitions.htm