The problem resides in the conversion process from FAT32 to NTFS. The clusters needs to aligned to 4k boundaries, if they aren't, the parttion is converted with the smallest possible cluster size (which is 512). Actually, this is not such a bad thing as it seems- of course, theoretically speaking smaller cluster - greater overhead, but practical it's not very visible (of course, if you have many small files, it will become painfully visible, but this not the case of the average user).
Partition Magic 7 Pro documentation claims that the program has a feature (in conversion menu) that aligns clusters on a FAT32 partition to 4k boundaries (for the interested ones, it's available for free at PowerQuest site), which allows a conversion to NTFS without a cluster resize. Although I own this program, I couldn't find the specified feature...
I don't think there are other programs that can do the conversion, because Microsoft's licensing system (also the reason for the lack of a free NTFS driver for DOS/Win9x). In fact, Partition Magic must use MS's CONVERT.EXE to do the trick...
A workaround (which I've tried myself) is to archive all the files on the partition to be converted in one big RAR/ZIP/ACE or whatever file (like a disk image...). This way you can do the 4k alignment and bypass the cluster conversion.