The original version of DOS did not recognise hard disks at all. Only floppy disks (the 5-1/4 inch variety since the 8 inch ones were effectively obsolete by this time) could be formatted and used with DOS. The file system used to store files on a floppy disk which was established on the disk by the format process was FAT12. The latest version of DOS (now called Windows ME) can still format floppy disks (now the 3-1/2 inch variety where the disk comes in a hard plastic case instead of a soft cardboard cover) and still uses the FAT12 file system with them. FAT 12 supports up to 4084 clusters (15Mb) and is identified by 0x01 in the file system identifier on the drive (since this was the first file system recognised by PCs.
When hard disks were first introduced and supported by DOS 2.0, an early version of FAT16 was introduced to go with it. This version of FAT16 supported up to 65,000 clusters and can handle partition sizes up to 32Mb. It is identified by 0x04 in the file system identifier. DOS 4.0 introduced a new version of FAT16 (FAT16B) which increased the 32Mb limit to 2.0Gb. This is the version of FAT16 used and supported on all computers using the FAT16 file system. It is identified by 0x06 in the file system identifier.
Windows 95 OEM Service release 2 introduced FAT32 which can handle partition sizes between 256Mb and 2.0Tb (2048Gb). This is a more efficient file system than FAT16 and wastes less space by using a smaller cluster size. It is identified by 0x0B in the file system identifier.
The only time you need to worry about which version of FAT that your disk is using is if you decide to convert a FAT16 partition to FAT32. When you format a disk your operating system will automatically choose the correct version of FAT to use. Provided that you have a late enough version of DOS/Windows, your operating system will be able to access and use each of these different file systems.
There are a number of other file systems which DOS/Windows is not able to access directly. If any of the following file systems are used to format partitions on your hard disk then your DOS/Windows operating system will be unable to see those partitions. As far as DOS/Windows is concerned these partitions don't exist. In some cases you can enable DOS/Windows to read (and maybe even write) files on these other file systems by loading an appropriate third party driver.
Please note that the above is not a complete list of all file systems.
This article written by Stephen Chapman, Felgall Pty Ltd.