Ntop and Nagios are for different things.
Ntop will help you analyse your network traffic in a variety of ways - e.g. what network devices are generating the most network traffic, what protocols are running across your network.
Nagios is for monitoring lots of things (almost anything you can think of) across multiple devices, and then getting alerted when what is monitored reaches a threshold you specify.
If you've read the ntop website and think this matches your needs, you don't need Nagios.
Either product should be run on a dedicated server, unless your network is very small, in which case you might run it on another server that is used for management purposes. Don't put it on a server providing services (e.g. email, database) your users access.