Well I think I just would expect to loose my datas if I reformated my HD or by other means replaced the file system.
I had some problems to understand this question at all .. how can anyone even think about running Linux on fat32 ?? (I have tried and I was not much impressed about that experience.)
Well, I guess that you are thinking about is to run the Linux installation, the SME as is with it's own Linux file system and then to add a data or back up disk based on fat32 ??
I think the main drawback is that you loose all the data security and that you can not controll user rights on the fat32 partion.
For some time a go I bade a backup arrangement using a USB harddisk. I wonder if I did not use fat32 on that backup harddisk. For such a backup purpose where the HD is just temporarely mounted during backup, I think fat32 can be used. In this case you can also move your datas over to a Windows machine.
For all other purposes I think a file system with zero security and poor performance under Linux will be a not so good choice.
At the time I tried to run a complete Linux installation on Fat32 (not the sme server) I think my experience was that the size of the installation (the use of the harddisk) allmost doubled while the performance were really poor, and as mentioned .. zero security.