The FAT/FAT32 filesystems automatically create a backup File Allocation Table in case the primary FAT gets corrupted. Of course, as you're seeing, the implementaion isn't entirely perfect.
If a reformat didn't clear things up:
1. Get a bootable floppy with fdisk on it.
2. Boot from that and use fdisk to delete the existing partition entirely.
3. Reboot to write the changes to the partition table(s).
4. Use fdisk again to create a new partition.
5. Reboot again, reinstall the OS, and see if the problem is gone.
DMR
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