In a nutshell yes. Converting to NTFS requires the partition and drive to be formatted in NTFS format. Back all files up and copy them back to the partition when it's done. I move files from my fat32 win98se system to storage on my NTFS system. Works fine.
Seti is incorrect, to convert FAT32 to NTFS follow this procedure.
1/. Back up all personal data on the target drive as a precaution
2/. Open a command prompt (Start>Programmes>Accessories>Command Prompt), Type c:\>convert c: /fs:ntfs (or which drive letter denotes the drive to be converted) and press Enter. Add the volume name when prompted. In your case it will be C:\>convert D: /fs:ntfs
3/. Once the process has completed review the command output to be sure that the file system was converted and didn't experience errors. If you chose to convert drive c: a reboot is required to complete the process.
Using this command will convert the drive and leave your data intact