If you take a dose of allnight (scroll up to Adventurer's Armory) you do not suffer the effects of fatigue for 8 hours. I presume you can still gain the fatigued condition during that 8-hour period but you will not suffer the effects of fatigue. Subsequntly, if you do something that would make you fatigued while you have the fatigued condition, you instead gain the exhausted condition. Allnight does not negate the effects of the exhausted condition, so you may become exhausted in spite of being under the effects of allnight. (However, after an hour of rest you are back on your feet again and ready to party.)
Is this correct? Is this a limit on the usefulness of allnight, and a sobering truth for barbarians and Academae graduates (curse of the Crimson Throne Player's Guide) trying to utilize allnight to solve their problems? Or, is the intent of allnight to circumvent the effects of fatigue and exhaustion altogether?
If the above reasoning is not correct, then do you not become exhausted when you do something that would make you fatigued while you have the fatigued condition but are not actually suffering the effects of fatigue?
During that 8 hours you do not suffer fatigue, I would say you cannot become exhausted either. After the 8 hours you are automatically exhausted anyways.
If you are simply wanting to avoid sleeping, get some potions of Keep Watch :)