First of all I would go with NTFS if you got 2000.
But to answer your question, its either doing clean install and re-installing all your stuff. Highly recomended.
OR, doing the upgrade and dealing with the problems that WILL arise along the way, and trust me there will be problems. it is MS that you're dealing with.
Your last option is to get at least 2G of free space and install 2000 as your second OS and multiboot.
I would recomend doing a clean install
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