Considering L-arginine is an amino acid complete with carbon, nitrogen oxygen and hydrogen it can't "convert" into NO technically speaking. It can however be involved in reactions from which NO can arise though (which I'm guessing is what you were saying anyway). All amino acids carry an amino group from which they get their name. This group contains nitrogen and so could very well be used to generate NO.
Whether that is the specific mechanism of action for Arginine and its role in getting your dick hard I'm not really sure. It seems quite within the realm of possibility as far as my biochemistry knowledge goes though.
I didn't know people took arginine as a sexual performance enhancer. Seems strange to be dosing yourself with non-essential amino acids but I suppose we have dosed ourselves with stranger things over the centuries.
