You can "upgrade your system to XP and maintain FAT32 file system. There is no need to re-format the hard drive to NTFS. NTFS is more secure than FAT32 and easier to manage security profiles. "Upgrade" to XP and maintain your 32 on the upgrade (XP will allow you to choose to change file system at install/upgrade). Check your files (programs, misc for integrity) then at your leaisure, open a command prompt and enter:
convert c: /fs:ntfs
you will then convert your files to ntfs. You can convert FROM FAT32 to NTFS. You CANNOT convert from NTFS to FAT32. You can do this without reformatiing your hard drive. Although reccommended I have never backed up files when using this method and never lost files or programs. Have used this on a 110 workstation network. (Call me "Lucky")