I've never gotten such a setup to work. Old games never ran any better from a FAT32 partition than from NTFS. What sort of games have you gotten to work solely by changing the type of formatting of the drive they are on? Perhaps this only makes a difference for certain games?
Of course, regardless of how you set up the second partition, you should always set up a second partition for data and leave Windows alone on C. This makes it far easier to reformat and reinstall Windows without losing any data. You can even move your profile settings (My Documents, Start Menu, Desktop, the whole shebang) to the D drive with TweakUI (free utility provided by Microsoft) and do a registry backup after you install your main programs. Then, after you reinstall Windows, all you need to do is use this registry backup and you will be ready to go in no time.
For older DOS games (older than MOO2), I find that
DOSBox works wonders.