I've been accessing an ext3 partition from Windows using the IFS driver. I discovered a major pitfall today. I inadvertantly filled the volume up. XP Home could not handle it. It didn't simply tell me the volume was full, terminate the write, and move on. There was a popup saying something along the lines of "delayed write to cache failed". The system slowed to a near halt, and the HDD light continued to hammer away until I forced a power down. It seems as if Windows didn't know the volume was full so it could tell the app to stop writing. I think the app continued to try to write, and Windows was stuck in a failure loop.

Until now I have been thinking ext3 would be better than vfat and ntfs for windows since it's relatively resilient to fragmentation. But if filling the drive up is going to cause this, it's not worth it.

ext3 ain't the problem the quality of the driver (and maybe the interface itself) is. I tried an IFS a while back, and found it less than robust - and harder to remove than install.
I only use 'doze when I have to, and tend to only use vfat - but I don't move large files, or do it very often.
ntfs-3g looks pretty good, but I haven't used it on real (valuable) data.

Yup:
Just installed and used ntfs-3g the other day to transfer 3 Debian Etch DVD ISO's to my home partition from NTFS partition in my external USB drive to keep the ISO's updated with jigdo. I had to use someone else's high speed connection to get the ISO's as I'm on dialup which is why they were in an NTFS partition as my laptop only has XP Media Center right now, soon to have Mandriva 2007. NTFS-3g works great.

Now I hope to not get too many comments on this next paragraph.

I use Everest Ultimate Edition to help with working on customer computers, it tells me everything, as well as some benchmark testing on performance. I quit defragmenting Windows XP systems a couple years ago because contrary to what Microsoft says, there is a performance penalty when you defragment XP (at least, after a fresh install). I also use a powerful boot manager that has many features such as: making partitions (all primary, over 200 if needed), sliding partitions, non destructive re-sizing partitions, compressed images (backup) of partitions, wiping partitions/volumes. As with anybody, I know how much of a OS's partition is used and how much is free, when I go to shrink a partition (re-size), I can shrink it to just over the amount that is actually used, eliminating most of the free space and they boot up and work just fine. Meaning: apparently, the files XP tells you can't be moved during a defragmentation, can be moved, as you may have noticed there is usually free space here and there after a defragmentation. Although I have not gone back and did a defragmentation after a re-size to verify that part, so it is not written in stone.