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.

Your best bet is to go NTFS. Fat 32 is almost out dated, but I think it all has to do with compression and size.  but there are differences between them and its up to u to decide. I say go NTFS.
Here are a few links to look at:
http://www.ntfs.com/ntfs_vs_fat.htm
http://www.thundercloud.net/information-avenue/ntfs-vs-fat32/

NTFS is better if You want more privacy.
It has a 7 level protection while FAT32 has 0.
But FAT32 is much faster than NTFS.

So, if You want a safe OS covrt it to NTFS, is You nees a fast OS don't do anything.