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.

I think the biggest advantage is the fact that NTFS is faster than FAT. Check out this link:
http://www.ntfs.com/ntfs_vs_fat.htm
You need a recent Windows OS to run NTFS. Your running XP Pro so you won't have a problem but Win 98 for example does not recognise NTFS. As far as hardware goes you should be right. Just make sure you install service pack 1 or service pack 2 if you are using a hard drive over 137GB otherwise XP will not recognise its full size.

Some of the main reasons NTFS is better is because it offers a superior architecture, support for larger files, security features such as access control and logging, enhanced reliability, and more. But to the casual user, it would hardly make the slightest bit of difference.