Partitioning a large drive into several smaller chunks is almost never worth the added hassle. Why?
1) FAT32 renders "cluster slack" moot. With the standard 8k clusters imposed on a FAT32 partition larger than 8.4G, and 16k clusters for drives around 20G, the average 1.0G of data will waste a paltry 20M of space. How do I know this?
Well, I recently did a survey of several computers I sold. To do this on your own machine, go to My Computer, double click on C:\, press Ctrl-A, and click File>Properties (ignore any message about the hidden files in your root directory, they're insignificant). A window will pop up showing you some important numbers. First, a count of the files on this drive. Then, under "Size", two numbers: the first will be the total size of all your files, and the second will be the total space occupied by all your files including wasted clusters. The second number will always be a multiple of your cluster size, and it will always be large than the first number. (For your cluster size, type CHKDSK at the DOS prompt, and read the size of each allocation unit.) By subtracting the first number from the second number, you get the exact amount of wasted space on the drive. It ends up being a lot less than you'd expect.
Another interesting number is the average file size, which comes from dividing the total file size (not the total occupied space) by the number of files on the drive. With these numbers, I calculated the average size of a file on a well-used Windows 98 drive. I found an average file on an average system takes up 150k, which means that an average 1G of data contains about 6990 files. A very good estimate of the amount of wasted space in any size data is
(Total Size of Data / Average File Size) * (Cluster Size / 2)
Why? Well, files are stored on your hard drive according to the rule that no two files can occupy the same cluster. If a file is smaller than a cluster, or if the file ends before the end of a cluter, the rest of the cluster is wasted. Logically then, an average file will waste half a cluster, since by probability the end of this file will fall in the middle of a cluster. So the amount of wasted space for a given set of data is the number of files (Total Size / Average File Size) times one half of the cluster size. You can check this yourself by doing the calculation on your own data and comparing it to the exact number Windows gives. It is actually a very conservative estimate, probably because the base Windows files are smaller than the files you accumulate later, and because a few large files can save a lot of space.
This formula tells us two things: First, bigger clusters waste more space (duh). Second, larger average file sizes waste less space. People with drives occupied by the relatively huge files of MP3's and graphics waste very little space. Of course, under Windows 2000's NTFS partitions, cluster slack is negligible, due to the tiny 512 byte clusters (same size as on floppy disks, actually.)
2) The performance gains from tinkering with the Windows swap file are dubious at best. You would probably be better off working at minimum wage and devoting the money to a hard drive or ram upgrade than spending the same time wrestling with partitions! Even placing the swap file on the fastest portion of the disk shows very little, if any, real world performance benefit. And think of the hassle in managing it all.
3) FDISK is the only freely available partitioning tool and is hardly user friendly. You could go out and purchase Partition Magic or similar software, but for the same money you could just sell your old drive and buy a bigger, faster one!
4) Partitioning your hard drive will not save you time if you need to reinstall your OS. Why?
Even under a full-drive partition, Windows can be reinstalled on top of itself to fix minor problems, as can your programs if they become corrupted. This will take the same time regardless of your partition arrangement.
A common argument for partitions is that, with a small (600M or so) operating system partition and some kind of disk imaging software (Norton Ghost, for instance), you can restore a corrupted Windows installation in minutes. In reality, it just doesn't work this way. As soon as Windows is restored, the registry reverts to its default state and anything pertaining to your applications is lost, rendering them unstable or inoperable. This forces you to manually reinstall your applications to restore the lost registry keys. Of course, you don't have to restore your data, but any prudent individual would already have a safe external backup system, so all data could be retrieved easily from there.
So, the only time really saved by a small, OS-only partition, is the installation of the OS itself, which is not the biggest factor. In fact, the same time savings could be garnered by simply taking an image of the entire drive after installing all drivers/programs. This image, like any other important data, must be backed up externally, and once that is done, the partitioning scheme is again rendered redundant.
Many people argue that partitions allow them to backup their applications to a convinient storage area. This is weak because anyone with legal copies of their software will have the proper installation disks on hand. If certain programs downloaded from the Internet are important enough to backup to a serparate partition, then they are important enough to backup to safe removable media, rendering separate partitions redundant.
Personal data files, too, must always be backed up to some safe external medium, and since legitimate data files (financial records, written documents, contact lists) are so small, they often fit on a single floppy. Even if you work with large graphics, you must periodically back them up to some other external media, in case of theft, fire, or drive failure. And with CD burners so cheap and fast nowadays, there's no excuse not to backup your sensitive data in case of a hard drive crash. Hoping a hard drive crash will confine itself to a single partition is unwise.
The key point here is the backing up your data safely is an all-or-nothing business. You can't go half way and assume it does any good. To be prudent, you must take the proper precautions against fire, theft, or drive failure, and use an external backup device. Once that is done, partitioning holds very few advantages.
5) Partitioning does not help you organize your files. That's what folders are for. It is actually easier to keep track of your data files when they're all on the same drive, organized into different folders with descriptive names. It makes saving and navigation easier, too, because you never have to select a new drive to browse.
So we have basically eliminated all the reasons people give for partitioning data: It doesn't save you much space, it won't save you time reinstalling your OS and programs, it won't increase performance significantly, and it won't help you stay organized. About the ONLY thing partitions are good for is booting to multiple operating systems.
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