Since you ask the question here, I presume you intend to install this on a linux box? if so, you can use a native linux file system or you can use FAT (not recommended). The filesystem is irrelevant when you are accessing the drive over a network; you access it using network protocols and the host machine translates that to the required filesystem.
If, as michaelk commented, you intend to dual boot with Windows, and you want Windows to be able to access it, then FAT is pretty much your only choice. You could use ntfs and use the captive-ntfs package on Linux to access it, but that package has a lot of overhead and, on my machines at least, it also has some issues.
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