Er.. me not guru, but I'm a long time NT4 WS man with a little experience of Server on a Network. I don't think there is any basic difference in the kernels of WS and Server.
I have a 2GB Boot partition using FAT. I also have (on a separate physical drive) a 17GB partition using NTFS. Smaller FAT partitions have the advantage that they waste less disk space as they have smaller clusters. Having the Boot partition as FAT has the advantage that you can boot to DOS with a floppy in a crisis and manipulate the files with DOS utilities. DOS can't see NTFS. NTFS is good for stuff you aren't ever going to have to fiddle with manually.
I'll read up some more about the problem you've experienced and get back if I come up with anything useful.