File system for the casper-rw file or partition
ext4 file system is more advanced than the previous
ext3 file systems. It is the standard file system used in many linux distros, and is well debugged and polished.
ext3 have journaling, which helps a lot, when there are problems with the file system, and the file system must be repaired. But journaling causes additional write operations to the drive, and if it is USB pendrive or memory card, it can cause excessive wear of the memory cells. You can turn off journaling.
ext2 works well without tweaks in a USB pendrive or memory card, but I would recommend
ext4 with journaling turned off.
In an SSD or HDD I suggest that you use
ext4 with journaling turned on (which is the default).
Please notice that the casper-rw partition need not be in the same drive as the persistent live operating system. This works with all Ubuntu versions, when booting via grub, and I have read (but not tested yet) that the newest version of syslinux can manage it too.
I suggest the same choice of file system for casper-rw files and partitions.
File system for the home-rw file or partition
If you create a
home-rw file or partition, the standard advice is to use the same file system and tweaks as for the
casper-rw partition. But there is an alternative, that makes it available to Windows.
I am experimenting with the UDF file system for home-rw. It works well with Ubuntu persistent live systems, and when the [USB pen]drive is plugged into a computer running Windows, it will be mounted with read/write permissions, so that files can be transferred easily between the Ubuntu persistent live system and Windows.
Installed system in an external drive
If you want an up to date system with full flexibility concerning what to install, you should use an installed system, installed into an external drive like it were installed into an internal drive. Such a system can be portable between computers too, but not as portable as a persistent live system.
Some claim on the internet that persistence reduces lifespan of the USB stick. Is this true?
Experimenting with the UDF file system for home-rw
Boot Ubuntu from external drive