Well, its all true. NTFSDOS can read NTFS partitions when you boot the system from DOS. And NTFSDOS makes them appear exactly as if they were FAT drives, no matter how many files are on them. However, the situation is not as bad as you think. There are holes in the holes that Mark Russinovich and Bryce Cogswell have tried to fill, or drive through, or whatever their intentions are.
For NTFSDOS to work, you must physically access the system because the network redirectors in Windows for Workgroups and Win95 already let you access network shares of NTFS volumes. If you can boot from a floppy (on Intel systems only) or install the utility on the hard drive of a Windows-driven system, you can execute NTFSDOS. It stays in memory until shutdown, granting you read-only access to NTFS-formatted disks or partitions on the local system.
You can protect yourself by exploiting what NTFSDOS doesnt do: Version 1.1 doesnt read a partition larger than 2 GB because DOS cant read past that boundary (a new NTFSDOS version will read >2GB). NTFSDOS doesnt read striped disks, so anything with RAID is inaccessible. And NTFSDOS doesnt write to an NTFS partition, but a planned version will. So, if you have extra money for some larger hard drives, build up your system so that DOS cant run on it. Or if you are dual-booting, make your NT stuff big enough to act as a firewall.
Other concerns (geez, I hope Im not giving anyone ideas) are remote server management utilities and hardware: Watch out with server add-in boards that let you remotely manage a server, down to the hardware level, even if youre booting from a floppy thousands of miles away from the server. This capability can be dangerous if, say, disgruntled employees get your servers phone number and have the system management utility. They can boot from a floppy locally and read all your NTFS files. If you use hardware (power on) passwords, this scenario isnt a problem.
You can protect yourself by emulating secure data warehouses: Implement physical security on server systems by limiting access to the boxes and disable floppy drives, turn on hardware passwords on workstations, disable automatic logons and shutdown features, and so forth. You cant hold NT responsible for NTFS security if NT isnt running as Microsoft says.
What can you legitimately use NTFSDOS for? Perhaps you can back up an NTFS volume from Windows 3.x. But if you have an NTFS volume, you are running NT, so why not use an NT-native backup utility? Or you can try to read an NTFS volume on a crashed NT system to see whether your files are still there. Just be aware that if you are using NTFSDOS legitimately and not hacking someone elses box, you must be careful. NTFSDOS can corrupt the data you pull from an NTFS volume, and the makers obviously offer no guarantees about maintaining data integrity.
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