Ntfs verses fat32 with virtual pc?

[Mozart]

I have a new computer and was talked into using ntfs as its supposed to be soo much better. Since I installed it I can't use my hiren disk ( this is a big repair disk) which is dos based. I also made a password recovery disk which will only work on my old xp fat32 computer . Tried to use microsofts free virtual pc2007 and got message that my operating system doesn't support it,yet virtual pc is supposed to be usable with vista so I'm confused. For virtual pc to work on vista must you use fat32 . What about these utilities that can fix windows or back them up must they be dos based also?