I find that there is less fragmentation on an NT File System (when compared to FAT32). So unless you have a small drive/partition (like under 6gig) and are going to be the only user, go NTFS.
And yes, Partition Magic 6 will let you go from NTFS to FAT, but I would worry on the possible implications (if any). But I will say it did a beautiful job of merging part of my NTFS partition and FAT32 partition, thus making a 3rd partition (for Linux). All is well.....