Linux – Which Linux file systems for USB sticks

There's an EXE installer for Puppy Linux which boots from an .iso on FAT32, NTFS or Linux filesystems (i.e. ext2/ext3/ext4, xfs, etc.) using syslinux and runs in RAM using unionfs/aufs with full access to persistent storage (disk, SD, flashdrive, etc.).

Other ISOs can be mounted, from commandline or script of course, as well as by clicking on them in the included ROX-Filer file manager. One convenient use of this is to selectively access or restore files from an old version instead of having to roll back everything.

The original Puppy Linux distribution ISO, which itself is an usually an ext3/4 filesystem, is kept on the lowest layer of the aufs stack. Changes are recorded in the topmost layer and flushed to disk periodically (configurable) to a "savefile". On boot, the original ISO is loaded to RAM and mounted read-only, then the savefile is loaded and mounted read-only to overlay it and an empty read-write layer mounted for any new changes. To preserve a history of changes, just setup automatic or manual coping of the savefile ISO to an archival directory.

The O/S "layering" of unionfs/aufs along with multi-mounting of filesystems are the core technologies at work here, so if Puppy Linux doesn't work for you, look for other distros using them.

There are quite a number of installation options available for Puppy Linux including a Windows EXE Installer which is a separate package that sets up the Windows boot loader for dual-boot.

Here's an article on How To Geek about how ext2/ext3 allocates files on the disk. And they also have an article asking "Do you really need to defrag?"

On why FAT becomes fragmented:

"When you save a file to a FAT file system, [the file is saved] as close to the start of the disk as possible. When you save a second file, [the file is saved] right after the first file – and so on. When the original files grow in size, they will always become fragmented. There’s no nearby room for them to grow into."
-How To Geek

And wikipedia has more information about FAT fragmentation.

On how EXT2,3,4 allocate files:

"ext2, ext3, and ext4 file systems [...] allocates files in a more intelligent way. Instead of placing multiple files near each other on the hard disk, Linux file systems scatter different files all over the disk, leaving a large amount of free space between them."
-How To Geek

(And more info on defragmentation on ext3, from wikipedia)

"Modern Linux filesystem(s) keep fragmentation at a minimum by keeping all blocks in a file close together, even if they can't be stored in consecutive sectors. Some filesystems, like ext3, effectively allocate the free block that is nearest to other blocks in a file. Therefore it is not necessary to worry about fragmentation in a Linux system."
-TLDP