NTFS!!! Fat32 has a 4 gig limit on filesize, and at a decent bitrate, a 2 hour movie will go over that. DVD's hold 4.7 gig, so just to author a 2 hour show (if you don't want to waste space/lose quality), you need NTFS.
As per rebootjim's reply, definitely NTFS as it's not limited on file sizes, it's also more secure and the hard drive size can exceed 4GB as well. For more details, please see the link below:- http://www.microsoft.com/whdc/system/winpreinst/ntfs-preinstall.mspx#EDAA
