linux, which is what the phatbox runs, has to have support to read the filesystem. The way the phatbox is set up it expects the file system to be Fat32 for both partitions on the DMS. if they wanted to they could add NTFS support but it would increase the size of the kernel and maybe not fit in the flash rom, but I dont know for sure.
further more.. I dont really see any reason at all to add NTFS support to a device like the phatbox.. NTFS features are for servers and workstations.. logging file system, security etc are all rather pointless for an embedded music player. and filesystem compressions doesnt really buy you anything but increased CPU usage when dealing with MP3s and the like as they dont compress much if at all.