When you invoke Windows 2000 Setup by running Winnt.exe from a Microsoft Windows boot floppy, or from MS-DOS, and you install to a FAT16 partition greater than 2-GB, setup hangs.
NOTE: If you restart your computer, Setup completes normally.
This problem is due to the fact that MS-DOS and Windows DO NOT support FAT16 partition greater than 2-GB.
To resolve this problem, use NTFS.
If you elect to create a FAT32 partition, restrict it to 32-GB.