[Japo]

I think you're right that NTFS is the way to go, the only use of FAT32 nowadays is if you need backwards compatibility for whatever reason. I would have chosen the second option, but if you check the disc's properties and it says NTFS and everything works, it should be fine. You could scan the disc just in case.

The option to convert FAT32 to NTFS must be there to let you preserve your data in a previously used hard disc. Since the computer is brand new I don't know why could it be already formatted in FAT32, perhaps it wasn't and when you selected that option and the installation program didn't find a FAT32 format it just ignored you and formatted the disc normally. Also I don't know if hard discs are sold already formatted, and in which format. But even if the disc came formatted in FAT32 you could (and should) have chosen to format anew, the only purpose of the conversion would be preserving already existing data which your disc didn't contain.

Also the difference between the first and second option is that you can format a disc in quick mode if it's already formatted --in the same format. Again I don't know if you bought your disc already formatted but with the second option (slow NTFS format) you can't go wrong, whether the disc is formatted or not, and whatever the previous format if any.

If you want to be really sure you can simply repeat the procedure, choosing slow NTFS formatting, that will erase the disc completely, then you'd install Win again.

EDIT: Me late too. :P Just noting that DOS v6 and lower cannot read even FAT32, only FAT16.