The folder %1 refers to a drive that is not formatted for the NTFS file system. Because this folder can be replicated among ...

The folder %1 refers to a drive that is not formatted for the NTFS file system. Because this folder can be replicated among AD LDS servers on multiple computers, NTFS is required. Select a folder on a drive formatted for NTFS.  To convert drives formatted with the FAT file system to the NTFS file system, use the Convert.exe command-line tool. For more information about the Convert.exe tool, see Help and Support.