Yes, NTFS in Windows XP Professional supports file compression. Users can compress individual files or entire folders, reducing the amount of disk space they occupy. This feature is useful for managing storage, especially on systems with limited disk capacity. However, it may slightly impact system performance when accessing compressed files.
Windows NT4 Service Pack4 and Windows XP Professional
NTFS (Compression is a feature provided by NTFS)
Not natively, although there are programs that will allow you to read an NTFS partition.
COMPACT
NetBSD, Windows, and Linux each support both FAT and NTFS file systems.
Because Windows 98 doesn't support reading or writing NTFS partitions.
Windows 98 has no built-in support for NTFS. This is not a problem, but a missing feature.
Any FAT and NTFS.
Windows NT4 supports: FAT, NTFS (version 4) Windows 2000 supports: FAT, FAT16, FAT32, NTFS (versions 4 and 5)
No. Windows ME cannot boot off of NTFS partitions, and it cannot read them without special software.
NTFS
If you are installing windows XP with Windows 9x or me than the I would recommend you to use FAT32 as if you use NTFS than you wont be able to access Windows XP with NTFS partition. If you are installing Windows XP with Windows NT or Windows 2000 than you can use any partition type. But I would recommend to use NTFS.