Can WinXP read a FAT32 formatted drive?
Yes, it can, although I have heard of people who have had some problems getting Windows XP to recognize the drive.
Yes - (IIRC) when installing XP on a virgin machine, you get the choice of partitioning/formatting the drive as FAT32 or NTFS - XP can fully utilise FAT32 drives and can convert a FAT32 drive to NTFS, even after installation (but this is a one-way conversion). Win9x cannot natively read an NTFS formatted drive.
I’m pretty sure that you’re not recalling correctly here, and that XP can in fact not be installed on a FAT32 drive, although it can read them. I could be wrong, though.
You were right that you might be wrong. XP will install on a FAT32 or NTFS formatted drive, but there are limitations re intial sizing if the drive is being partitioned and formatted during install vs being placed on a previously formatted drive .