Should You Use NTFS? Details From Microsoft Michael Hayman
Details on this from Microsoft are rather sketchy. However, I have heard figures of around 70% capacity being possible before fragmentation occurs. In other words, if you take a 1Gb NTFS partition and put 700 MB of data onto it, all of the disk "space" will be used, because 700 MB of data actually equals 700 MB of data plus 300 MB of guard-band space too. Obviously, you can put 1Gb of data onto a 1Gb NTFS partition, but that last 300 MB or so will be fragmented.
This appears to be a good argument for not running NTFS partitions at full capacity. However, the real-world performance of NTFS has never in my experience really been affected by such things, so the power features of NT and NTFS (elevator seeking, unified cache manager and so forth) must be covering up and alleviating any problems.