Simply said filesystems are a hierarchy of directories, subdirectories and files in a device like a hard-drive, floppy or CD-ROM. A fyle system has a mount point -- the location in which the file system will start in the hard-drive, etc. See below this concept explained in details, what type of partitions can Linux recognize, and how to create the file systems when installing Linux (generally you can use a GUI to walk you through the installation process and which let you select defaults). I also included a link to a simple introduction on the use of diskettes in Linux.
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