Tue Dec 10, 2013 7:09 am
win32diskimager does not know or care about the formatting the sd card. It copies the 0s and 1s directly as they are in the img file. To answer your question more directly though, FAT is the only option that will work.
When the pi powers on, code from the pi's tiny bootrom executes, which is just enough to initialise the sd card and read a FAT partition. This then loads the firmware, which then can do fancier things like start the linux kernel.
If the first partition was NTFS, it would not boot at all.
Disclaimer: I haven't actually tried to format it as NTFS, nor do I know for sure that the bootrom can't handle NTFS, but it's a safe assumption to make.