Your question on writing an archive format made me curious again on writing an virtual file system again. I made a bare bones test version. But that still lacks a working directory structure. Also while writing i discover i can simplify things. I will post my results so far if you want them. But it is a Work in Progress.

As to your questions:
1) http://en.wikipedia.org/wiki/Journaling_file_system (according to this it is stored on hdd before an action takes place)

2) If you use xp with ntfs you still have to use defrag once in a while. So yes. Only ntfs is supposed to be smarter with realocating space then fat32. Also since there are undelete tools for ntfs also it just throws away the file recod entry and keeps the file intact until the space is used again. No hard evidence on this though. But do read this: http://technet.microsoft.com/en-us/l.../cc781134.aspx

PS google is my friend in research :-)