The NTFS file system will allow you to use the full capabilities of Windows XP. For example. EFS (encrypted file system) will only work on an NTFS partition.
However, if you have upgraded from a...
Windows XP natively supports FAT12, FAT16, FAT32, and NTFS. Other file systems, such as HPFS, JFS, ext2/3, and ReiserFS can be supported through an IFS (Installable File System).