Format it using the FAT32 file system. Although the version of NTFS in Windows XP has features that make it perform better than earlier versions of NTFS, you can still eek out some performance gains for small volumes by formatting them as FAT32 instead of NTFS. I'm not overly concerned about the lack of security from not having pagefile.sys protected by NTFS permissions since it's an unreadable binary file. If someone hacked into my system, they wouldn't need to bother with the paging file anyway.