Yes buteman, FAT32 is fine for USB flash drives (as long as he doesn't work with any files greater than 4Gb each in size - it would've made a fuss by now if he did).
It shouldn't be running chkdsk at every startup though. Try doing a thorough chkdsk in Windows to see if it cures the problem. Right-click the flash drive in My Computer > Properties > Tools > Check Now > tick both boxes > Start. G