The MFT is the heart of an NTFS partition. There is at least one entry in the MFT for every file on an NTFS volume. All the information about a file, including its' size, time and date stamps, permissions, data content, etc. are stored in the MFT (or in space described by the MFT).
To prevent fragmentation of the MFT, NTFS reserves space for the MFT in an effort to keep it as contiguous as it grows. This is important because defraggers can not move MFT records and fragmentation of the MFT can severely impact performance.
When you add files to an NTFS volume, entries are added to the MFT. When files are deleted from an NTFS volume, their MFT entries are marked as free and may be reused, but the MFT does not shrink. Thus, space used by these entries is not reclaimed from the disk.
NTFS reserves a percentage of the volume for exclusive use of the MFT. Space for files and directories will not be allocated from this MFT zone until all other space is allocated first. Depending on the average file size and other variables, either the reserved MFT zone or the unreserved space on the disk may be filled first.
Volumes with a few large files will exhaust the unreserved space first, while volumes with a large number of small files will exhaust the MFT zone space first. When either the MFT zone or the unreserved space fills, fragmentation of the MFT starts. If the unreserved space becomes full, space for user files and directories will be allocated from the MFT zone. If the MFT zone becomes full, space for new MFT entries will be allocated from the remainder of the disk.
You can impact the amount of space NTFS reserves for the MFT by editing:
HKEY_LOCAL_MACHINE\System\CurrentControlSet\Control\FileSystem
Add Value name NtfsMftZoneReservation as a type REG_DWORD and set the data value. The valid range is 1 - 4.
1 - The minimum percentage (undocument and changing in SP4) will be used.
4 - The maximum percentage will be used.
The ratio between these values is also undocumented and will also change with SP4.
NOTE: This is a run-time parameter and does not affect the format of a volume. It affects the way NTFS allocates space on all volumes. To be completely effective, this entry should in effect at the time you format a volume.