Windows 2000 Setup Upgrades Existing NTFS File System Volumes

When you install Windows 2000, existing NTFS volumes are upgraded to a newer version of the NTFS file system. This newer version of the NTFS file system includes capabilities such as disk quotas, encrypted files, journaling, and a number of other features that Windows 2000 components rely on to function correctly.

Upgrading the NTFS file system volumes is mandatory, and you do not have any choice or control over this process. All local NTFS volumes, including removable media, are upgraded to the new version of the NTFS file system. If, during the installation or upgrade process a version of Microsoft Windows NT earlier than Windows NT 4 Service Pack 4 (SP4) is detected, you receive a warning indicating that an earlier version of Windows NT was found and will not be accessible if you continue.

If you want to configure your computer to run Windows NT 4.0 and Windows 2000, you need to upgrade your version of Windows NT to Windows NT 4.0 SP4. For more information, please see the following article in the Microsoft Knowledge Base:
Windows 2000 Setup does not control the NTFS file system upgrade. Instead, it is handled by the NTFS driver when the volumes are being mounted. The following rules apply to the upgrade process:

• All locally-attached NTFS volumes are upgraded to the new version of the NTFS file system once the installation or upgrade process is completed. This occurs after you restart your computer the first time after the graphical portion of Setup.
• Any NTFS volumes that are removed or powered off during the installation or upgrade process are upgraded automatically when the drives are mounted. Any NTFS file system volumes that are not upgraded to the new version are not mounted in Windows 2000.
• Removable media that is formatted using the NTFS file system is upgraded either automatically after the installation or upgrade process, or when the media is inserted and mounted in Windows 2000.