Will there be some programs or hardware that I can't use if I convert my system from a FAT32 to NTFS? I currently am running windows xp professional. I had windows 98SE and then I f-disked and formated and did a full install of XP.

You'll be fine. All your software, hardware etc. will go via your operating system if they need to access any data. The software/hardware won't have a clue whether it's getting data from NTFS or FAT, it will just call a set of functions etc.