The advantages are that if you're installing FAT32 on a drive that moves around a lot and gets plugged into random computers, you can guarantee that any computer can read data off it.
The disadvantages are: Its a primative FS that doesn't support any of the features of a modern operating system.
So, good for pen drives, even iPods if you're going to use them to move data between Mac and Windows computers. Bad for a HD permenantly installed on a Mac.