NTFS is better for storage because it has a backup table of information. If the table in your MFT gets corrupted, the backup fixes it. http://www.cgsecurity.org/wiki/Advanced_NTFS_Boot_and_MFT_Repair
If you are looking to squeeze space, try changing the cluster size to reduce the size of the MFT.
Most of that is going to be a page file, recycle bin, system restore points etc. But I noticed that a huge chunk of one of my empty drives shows up as about 15% system reserved, which is weird because there is nothing on the drive.
From what I see, I don't trust this software at all. The defrag can be done via windows for free, the boot time rearrange is in tunexp 1.5 and the fact that it costs money makes me doubt the seriousness of this product.
Another easy question, hopefully. While running Diskeeper on my external drives, I notice a large area marked as "Reserved System Space" that cannot be accessed or used. Since this is on an external drive in a USB enclosure, and I only use it as one form of file back-up, I don't think it really needs to have such a large area for "System Space" unless that is what is required when it is a SATA drive formatted in NTFS. Is that large area needed just for the FAT or is there a way to utilize some of that area, and two, since it is only a file back-up drive, and I can maintain its security otherwise, would I benefit space-wise by reformatting it to FAT32 instead of NTFS?