2 Windows XP on Laptop

Hello, I just bought a used laptop (IBM Thinkpad R50p) equipped with an HDD Hitachi Travelstar 7K60 60 GB (HTS726060M9AT00). The first HDD was partitioned and formatted in FAT 32 but without any OS installed according to what was "sold" with just the drivers at the root of the HDD. I am contented to install XP Pro on it (option: keep the file system ....... not to lose the drivers) and then I'm starting to realize that "we" ask me what version of XP I want to start XP or XP Pro . which leaves me somewhat weird.
I want to know:

1. If it is better that I reformat the HDD to NTFS since I would like to create multiple partitions (1/system + prog, 2 / 3 Documents / Drivers), is that this requires that HDD to a FAT 32 partitioning or not at all.

2. Why I have this application on the OS to boot.

Thank you in advance

It is asking you to choose between the OS because there was a windows installed on the disc above and the "boot" file (the file that says if there is a launch system) has not been erased, so it has kept track of the windows.

The hard disk can be formatted to choose NTFS or FAT32. You can save all the drivers on a CD or a key and repeat the installation with the partition that you want.

backup what you want before reformatting and reinstalling everything as it should and in the proportions that you want.

Thank you all for your answers
1. partitioning NTFS bring me there a lot compared to the current FAT 32
2. I could do the same thing (my multi-partition) as FAT 32 to NTFS?

1. For a particular NTFS it will not be much of a problem but most important is probably the ability to store files> 4GB
2. Yes, partitioning is the same on both