Aside from security functions, the reliability of NTFS is far superior to Fat32. I have yet had lost clusters in NTFS, when in Fat32, if you just shutdown improperly, your drive gets messed up. Overall, NTFS just feels much more industrius and robust, and its designed for NT OS.
With regard to bootdisks, all you need is a cdrom that supports bootup, and just pop the win2k cd in, and it should bootup fine. Say bye-bye to floppies.
Heifetz