If you are stuck with the new HDD unable to be convered to NTFS and not booting as FAT32, simply re-install XP and tell it to reformat the HDD as NTFS. To be safe, disconnect the old HDD first.
If you still have problems, make sure you are working logged into an account with administrator rights.
If you still have problems, post the errors here, and/or put them verbatim into Google - I've fixed a few problems doing that.