I suggest skipping all that boot disk/whatever bullshit, and just booting off the CD. You don't have to worry about writing 0's, it'll work fine (and clean) if you allow XP's setup (running off the booted CD) to format the drive. Messing with fdisk and win98 bootdisks isn't really needed.
If you want to play with partitions, you can do it during the XP setup as well.
As for NTFS vs. FAT32, if you ever think you'll be going back to 98/ME(god forbid)/Switching to Linux for some reason, or you want to use the HD/Paritions in another machine that is using 98/ME/Linux, I'd use FAT32, as NTFS isn't supported in 98/ME, and badly supported in Linux.
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