For most home use purposes I doubt that you'd be able to tell the difference between the two file systems, speed-wise, without a benchmark. It is certain that the reliability benefits of NTFS are the most compelling reason for using it. But, as I implied earlier, it is important to learn about the file system and the recovery and repair techniques if you wish to use NTFS because it is a different file system. What works for FAT won't work for NTFS and vice versa. It appears that many people try to base the file system decision on speed. My response is to point out that a computer with a borked file system doesn't do anything at all, much less do it fast.
You can certainly use FAT32 on the C: partition and keep NTFS on the D: partition, but it's not an arrangement that I'd normally recommend on any system other than one that was running another operating system in addition to Windows XP, where I might need to have access to the C: partition when booted into an OS that doesn't know NTFS.
How large is the C: partition? If it is 32 megabytes or smaller, and if it was created by the Windows XP installer, then it may be possible to perform an optimum conversion on it. What I mean by optimum is that, if the partition was created by some other partition creator than the one that Windows XP ships with, then using the CONVERT utility to convert the partition from FAT32 to NTFS is very likely to result in file system cluster sizes of 512 bytes. That's NOT good. It will lead to a tendency for rapid file system AND internal MFT fragmentation, and that will be bad for performance. If the primary partition was created by the Windows XP setup then conversion would normally result in a 4 kiloybyte cluster size. That size is optimal for almost all normal circumstances. However, in any conversion process there is always the possibility that the cluster size will go to 512 bytes. This is determined by a number of factors including where the partition boundaries have been aligned with respect to multiples of the hard disk sectors.
- prosaic