I looked into this a bit a few months ago...
FAT32 isn't limited to 32GB. From what I read, it just doesn't work too good past that. It doesn't scale-up well.
Windows won't make a FAT32 partition larger than 32GB. Call it a "feature". Or, another way for MS to collect more money from you... If you want a large hard-drive in Windows, you have to switch to the NT line so you can use NTFS.
If you do make a larger FAT32 partition, Windows shouldn't have any trouble using it.
I didn't go past this point, so I don't know if Linux will create a larger FAT32 partition.