Rufus can and did make a persistent partition as ext3. As per your advice, I used GParted during my first run Fossapup session to shrink the persistent partition and put in a Fat32 partition. I did this by moving the start point of the persistent partition, hence the order of the partitions is now: Fat32 boot - new Fat32 -ext3. If I re-enter GParted just to have a look at the USB, this is the order I see. (However, the puppy loads the new partition as /dev/sdb3 and the persistent one as /dev/sdb2, I'm not sure about what effect that would have.) So my Windows 7 installation not seeing the new partition on the USB is apparently not a matter of the ext3 partition blocking access to the new FAT32 one.