In general I don't advise it.

  Forum Editor 00:17 07 Dec 2003

and in Windows XP you can only compress a drive that is formatted as NTFS.

The problem with drive compression is that each time you want to open a file Windows has to decompress it - and then compress it all over again when you close, or save the file. All of this can slow your machine considerably, and unless you have a real space problem I would avoid it like the plague. Better to simply buy a bigger drive if your budget permits; they aren't really that expensive nowadays, and you could use the new drive for all your data - keeping the existing drive for Windows and programs.

If you must compress, then consider using WinXPs file zipping utility. This will compress files or folders on the fly, and will work with a FAT drive as well as NTFS. You won't see any performance decrease with zipped files, and there are other advantages. For one thing you can create a zipped folder and then simply drag files into it to compress them. You can also add password protection to files in a zipped folder.

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