Using external hard drive with Linux and Windows XP

Dear linux experts, I have an iomega external hard drive (~500GB) that I would like to use with my linux machine (RedHat Enterprise 3.0) and also my laptop with Windows XP. The drive still has its original FAT32 file system. I read online ( http://www.basicallytech.com/blog/index.php?/archives/73-Using-a-USB-external-hard-disk-for-backups-with-Linux.html ) that FAT32 has significant shortcomings compared to ext2. So, I tried use GNU Parted to shrink the existing partition and make a new ext2 partition for backing up my linux machine. That did not work, and now, the original file system may be messed up. This what I see when I mount it on linux and run "df -h": *********************** Filesystem Size Used Avail Use% Mounted on /dev/sda2 6.8G 331M 6.1G 6% / /dev/sda1 99M 46M 48M 49% /boot /dev/sda7 208G 100G 99G 51% /home none 500M 0 500M 0% /dev/shm /dev/sda3 6.8G 4.0G 2.4G 63% /usr /dev/sda5 5.8G 1.1G 4.4G 20% /var /dev/sdb1 98G -512Z 460G 101% /mnt/HD *********************** See the last line in the output above. But the data in this partition seems fine. Here are my questions: (1) Is it worth the trouble to put in an ext2 partition for use with linux when FAT32 is already available? I plan to use this drive for backing up important work related stuff and want to keep it for a long time. (2) Have I messed up the existing FAT32 partition - is it safe to use or do I risk losing data? I'd greatly appreciate informed advice . . .

Thanks for the advice. The OS came pre-installed on a Dell machine and I haven't upgraded it since then due to lack of time and expertise. I don't like it much - many libraries are obsolete and I can't upgrade many applications (texmaker , Acrobat Reader etc.), but I'll probably stick with it a bit longer. Now to see if gparted will run on this old OS . . .