Knoppix, Persistent home and VMWare

I have a 512 mb persistent disk image for my knoppix. I would like to install vmware for a 2 gb xp installation for the rare app that still requires windows. Will the xp image use my home image, or can I make it on a fat32 partition. I assume it will not be possible on an ntfs partition. I do not want to run out of space in my home image. My home image only stores the configuration files as my data files are stored in a faat32 drive so they can be shared with XP when needed.

Any one have experience with this?

Thanks
Neeraj Nigam