A limitation of OSes with a DOS boot-record (Windows 9x, ME, etc), is that they must boot from the first primary partition of your hard drive (normally your C: drive). Microsoft's NOSes [Network Operating Systems, Windows Advanced Server (NT 3.1), Windows NT 3.5/3.51, Windows NT 4.0, Windows 2000 and XP] are more flexible. Not being dependant on a DOS boot record, you can install them to whatever partition you'd like. They still keep their boot files on the first primary partition (again, likely C:, often referred to as the 'system partition' ), but will boot the actual NOS directory on another partition (i.e. e:\winnt, referred to as the 'boot partition').
Why?
When attempting to install Microsoft's consumer OS and a business OS on the same system, file system complications become the concerns of the day. You have 3 types of file systems to consider in this Microsoft-centric scenario. FAT16 is the old faithful. Unfortunately, it supports partitions only up to 2 gigs in size for the consumer OS line (4GB under business OSes). FAT32 is Microsoft's extension to the FAT file system, and it became available with an intermedial release of Windows 95. It supports up to 2 Terabyte partitions. It can be used by three of the versions of Windows 95, Windows 9x/ME, and Windows 2000. How can you tell which version of FAT you are using with your home OS? When in My Computer, right-click and choose properties to see the file system type. You can also safely assume that if your consumer OS partition is greater than 2GB in size, you've got FAT32.
A note about NTFS versions. NT 4.00 does use a slightly different version of NTFS than do Windows 2000 and XP.
