Jylene,
There are a few factors you need to be aware of. You can change users from T&E to Full without problem and it will not affect existing time entries. All Projects and work items that are reportable and updated via Timesheet module are specified as 'Actual Effort updated from timesheets'. This is a work item field that you can show on the work plan to see which work items are enabled for this and which are not.
That said, you would NOT want to disable this for existing Projects/Work Items because existing time entries will be lost (pop up warning will be seen). There is also a system setting that specifies this setting for New Projects. If you do not want that, turn off the setting in System Settings and manually specify where needed.
When a work item is configured with 'Actual Effort updated from timesheets'=ON, Actual Effort can only be updated by Timesheets.
Wen a work item is configured with 'Actual Effort updated from timesheets'=OFF, Timesheet entries will NOT update Actual Effort. Effort will need to be manually updated by resources via the workplan or the progress update report (email form).
Note - If you have Email Only users that can only update progress using the progress update report, they cannot update actual effort on tasks that are configured with 'Actual Effort updated from timesheets'=ON