I am installing Windows XP on a computer and again I got to the point where it asks you to choose between a quick format and a full format. What is the difference? I know with Windows 7 & 8 installations it appears to do quick formats by default. Is there any difference between the two in terms of risk or consistency?
The term formatting is used for different things.
First it is used for low-level formatting a hard disc. This includes taking the disc and dividing it into small units - the blocks, which can be accessed by the operating system. Nowadays the manufacturers configure the sector size (like 512 bytes or 4096 bytes) and low-level format the disc. Normally the user can't low-level format a hard disc anymore.
Second formatting is used for high-level formatting a hard disc. This means that the operating system is writing a file system structure to the disc. For good old FAT (File Allocation Table) for example the system would write a boot sector to the first disc sector and an empty FAT to the following sectors. Empty in this case means that all entries in the File Allocation Table are marked as unused.
High-level formatting might include scanning the disc for bad sectors (check if every sector can be read) and it might include writing zeroes to all data sectors on the disc.
When you format a disc, then Windows XP does a high level format, it writes a file system structure to the disc. When you say full format, then Windows XP also scans all sectors on the disc for bad sectors (see MSKB). Since Windows Vista a full format writes zeroes to all data sectors (see MSKB). Accessing each sector on the disc takes much more time than the quick format which only writes the blocks that contain the file system structure. So normally a quick format is what you want because it is much faster. But there are cases where you might want to do a full format.
You asked about risks and consistency. I wrote about the risks above. Regarding consistency there is no difference. With every format the operating system writes the file system structure and this structure is the starting point for every file system access. It does not make any difference if unused sectors are zeroed out or filled with random data.
For more information you might want to take a look at the Wikipedia Article for Formatting.
A full format checks for bad sectors on the disk after formatting. This check is responsible for the majority of the time that it takes to format.
Quick format skips this check.
If you choose the Quick format option, the format removes files from the partition, but does not scan the disk for bad sectors. This option is best when your hard disk has been previously formatted and you are sure that your hard disk is not damaged nor has bad sectors. This can be a problem later because bad sectors that are not located can cause damage to the hard drive. For example, if data is later installed on this “bad sector”, the data will read errors or as corrupted files.
In simple terms, a Full format will truly scrub through the hard drive from scratch, rebuild all of its file structures, and scans the drive to make sure that everything is on a satisfactory level. On the other hand, what a Quick format does is lay down a blank FAT and directory table without checking for bad sectors.