You won't see any performance difference.
For the additional features, I'd go with NTFS.
And quit crossposting your questions.
Whilst im in the process of reloading my carputer with xp home, im just wondering if i would see any performance bennifit by formatting the drive up with fat32 and not ntfs. On older systems i have sometimes seen the odd bennifit but wondering what more experianced people in the carputer world think
NTFS has more overhead (streams, timestamps, journal entries, etc.) than FAT32, and is lower-performing up to a point. On larger drives, the benefit of using an MFT quickly outweighs the performance hit of the greater overhead, and thus NTFS is preferred in cases where the drive is large, while FAT32 is still used with smaller drives.
If you go embedded (with USB thumbdrive of CF card) you might want to enable online compression for less used files. If yes, only NTFS supports such feature.