FAT32 isn't a file, it's the way your PC stores files on its hard drive.
FAT32 is semi-obsolete (but still works). The newer version is called NTFS, but don't try to change it.
I've never heard of PC Guard, but there are dozens of anti-virus products out there. If it fails to work and causes problems, then I'd be inclined to remove it and use a different one. Most folk on here are fans of either AVG Free 8 or Avast. I use one on one machine and the other on the other. I haven't decided yet which I prefer. Both are free to private users, and both can be downloaded off the Internet.
To remove PC Guard, click Start - Control Panel - Add or Remove Programs, and select it.
Once you've removed it, restart your PC and go straight to the download site for AVG or Avast, download, and install.
Keep an eye on the service you get from Virgin Internet: their reputation with their customers isn't all that high (see
here).
If it gets bad, moving may be on the cards.