I have a 4 year-old 20 GB IDE hard drive that, according to SpinRite6, has no more spare blocks to use when a used block goes bad. Other than that, the disk is in good shape. I'd like to install an operating system on this disk using a filesystem that can gracefully handle such a situation (i.e. no spares). Any suggestions?

Note: I seem to recall that there is a filesystem that when set up, deliberately does not use the first and last few sectors of a partition, perhaps for this very purpose, but I can't remember any more details.

TIA...

Almost all filesystems have a way of mapping bad sectors. That is different from the hardware level sparing, which is transparent to the filesystem. In other words, you whatever filesystem you want.