Folder Guard Pro

I know windows xp have privacy options for folder under
the NTFS format but before I installed the OS I formatted
my hard drive under FAT32 format. I 've looked up to
support locally and online about conversion of format but
I didn't seem to find the answer to the question: will
conversion (not reformatting) to NTFS delete my saved
files? And I also read that there are disadvantages of
converting instead of reformatting like permissions and
stuff. So to get rid of all the hassles, I used the aid
of a software known as Folder Guard Pro. I would like to
check it's compatibility with XP because everything seems
to be fine under this program (and the software says it's
compatible with XP). And if I'm using multiple-users
under a stand-alone computer and changed the Windows
folder's attribute to restricted or hidden under a
restricted user will the program and all other programs
not run if the user logs on?