I bought an externat 1.8" USB drive and this drive has "NTFS" or "exFAT" as file system available.
Has anyone experience which one would be better to use with MorphOS? Also which FS would be MOST compatible with SFS? What I mean is about file names length, comments, extensions... when I copy files to it or from it.
Depends if other systems than MorphOS are going to read this drive, NTFS is read-only under MorphOS and exFAT is not supported. So... neither would be the answer as far as those two are concerned.
You should be able to repartition it with HDConfig, that way you can use SFS or maybe ext2/FAT32 for better compatibility with other systems.