if i were going to format my hard drive so i could change it to ntfs, how would i go about doing this? i purchased a computer pre-loaded with winxp, and it came with a recovery disk.. so i can probably boot to that so i can run an fdisk.. is there something in fdisk i need to do, or is there another way to set it.. or how is it done? thanks ;)

The easiest, if not the best way to do it is to use XP's built-in conversion utility. Start - run - convert c: /fs:ntfs will convert your drive to ntfs without you losing any data. No formatting required. Of course, if you want to reinstall from scratch (assuming your 'recovery disk' is the full XP install CD), you can just boot from the CD and let the setup program format it for you. Your call...

Is it really possible to convert without losing any data? Surely some data must be lost?! If so, are there real benifits to converting to NTFS?

I was skeptical too, so I backed up my data before trying, but it worked as advertised... Not really much to it, actually. The directory structure is rebuilt, and the MFT (master file table - NTFS equivalent of FAT, more or less) is created. None of your files are touched. The conversion requires enough free disk space to do this, otherwise it won't let you do the conversion. There are plenty of benefits to ntfs, not the least of which is better reliablity and more effecient file handling - especially with large drives. There is a slight performance penalty, particularly when writing files (all changes to files are logged so in the event of a crash, the system can restore the filesystem to its previous state - no such thing as 'crosslinked files', etc. in ntfs), but you probably wouldn't notice the difference except in extreme cases. In fact ntfs can sometimes be faster than fat - again, generally not noticeably more). If you convert from fat, the speed hit probably WILL be noticeable, since drives that are formatted with ntfs (rather than converted) are optimized as to cluster size and MFT location (a contiguous block at the beginning of the volume) whereas converted drives always use a cluster size of 512k (which is pretty small) and the MFT will be placed wherever space can be found - probably all over the drive - and the windows defrag utility won't touch the MFT, so it will remain fragmented forever...

After converted to NTFS, can I still share and transfer files from a FAT32 PC to NTFS PC or vice versa?

Yes, of course. The NTFS (or FAT) file structure is just a way of arranging the files on the hard drive; the actual file data isn't altered.

I usually defrag before I convert to NTFS.