[Venkatesh]

I have been using Linux (of many varieties) on FAT partitions. I do this because I don't care about security and FAT is universally accessible. There are a few caveats about doing this though.

First, you can't have symlinks. A direct consequence of this is that you cannot compile a linux kernel (as far as I know) on a FAT filesystem, as one step in the compile involves the creation of a symlink. Second, you lose all security. Any user can access any part of the filesystem. A non-root user can still do pretty much anything on a FAT system. Third, you lose many of the features of chown (change ownership), chmod (change mode), and ACLs.

Even then, for my uses, the benefits of universal access of any OS to any OS far outweigh the problems. I wouldn't recommend doing this unless you are sure of what you are doing, but if you are sure of what you are doing, then there are better options. Until that Linux NTFS driver gets better.