1. I would use "Open PS2 Loader", a.k.a. OPL to play your games from other media, than DVD.
2. Converting from NTFS to FAT32 won't change your files. However,... If you choose to format your drive, all files on the partition you're going to format, will be lost.
PS2 V7/DMS3 V2 (FW:2.4b7); Seagate Baracuda 200GB
PS2 V7/CC1.0 (FW:34 hacked v2 BM:2.1.6); Maxtor DiamondMAX9 PLUS 160GB
PS2 SCPH-30004R; NoMod+NoLaser
3xSony MC 8MB
MAX/Datel 16MB with Boot-CD
Custom FMCB 1.8b+ Beta-Build, my AIO 0.5, Sony&xRhino-Linux