You can convert from FAT32 -> NTFS in NT-based operating systems (NT, 2000, XP, 2003).
The solution to your problems is here:
http://support.microsoft.com/?kbid=271644
According to the KB article, it's because:
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The logical block address (LBA) is not calculated correctly for certain large Integrated Device Electronics (IDE) drives.
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The solution to your problems is:
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To resolve this problem, obtain the latest service pack for Windows 2000.
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For future reference, this was turned up by a Google search for the following:
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ntfs conversion "not enough disk space" error
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