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#31
1) I setup a USB stick with FAT32 and installed Windows 7 from the USB stick to an internal hard drive.
2) I setup an internal hard drive [E:] with FAT32 and installed Windows 7 from the internal hard drive to another internal hard drive [C:].
NOTE: Both installs ONLY installed as NTFS. You can NOT install on a FAT32 formatted drive.
In other words you can install FROM FAT32 but you cannot install ON FAT32.
I hope that helps.