Wikipedia
SYSTEM.INI was an initialization ( INI file) used in early versions of Microsoft Windows (from 1.01 up to Me) to load device drivers and the default Windows shell ( Program Manager or Windows Explorer), among other system settings. Many of these settings were honored in Windows 9x ( 95, 98 and Me), although the INI files had begun to be phased out in favor of the Windows Registry. Windows NT 4.0, 2000, XP and Server 2003 still acknowledge some SYSTEM.INI entries in order to provide backwards compatibility with older 16-bit applications. Windows Vista and beyond also have SYSTEM.INI as well. However, when a fresh install of XP/ Server 2003 is performed, the SYSTEM.INI file created contains by default only these lines:
; for 16-bit app support [drivers] wave=mmdrv.dll timer=timer.drv [mci] [driver32] [386enh] woafont=dosapp.FON EGA80WOA.FON=EGA80WOA.FON EGA40WOA.FON=EGA40WOA.FON CGA80WOA.FON=CGA80WOA.FON CGA40WOA.FON=CGA40WOA.FON