backing up from NTFS internal to FAT32 external

Hi
Having some problems doing the back up so here are the details.
I have an IBM Thinkpad R50e with XP Service pack 3. The hard drive is NTFS formatted with 74.5gb. I am trying to back up to an external HDD with 149gb space and FAT32 formatted.

I tried to back up using the Windows XP back up utility but it stopped after an hour saying it could not be completed due to an error and report is attached. I tried to save time and space by not asking for everything to be backed up but just ticking backup, backups, favourites and My Documents in the backup utility window.

Could someone explain how I can make this work, in the past I have just copied and pasted folders but I want to include system data as I think I may some malware (layered service provider LSP i386p problem) and understand that removal may damage the system.

Please help! :confused

 

OK so what do I do???:cry

 

And NTFS is way more secure and capaple of partition management.
32GB max with FAT32. Nearly (For practical purposes) with NTFS.

http://www.theeldergeek.com/ntfs_or_fat32_file_system.htm