btw, it's a nice tank and it looks good - a good start.
The plants consume the ammonia before it goes any further down the Nitrogen cycle, and the nitrifying bacteria drops in as it finds any ammonia and nitrite which end up as nitrates. Assuming there's enough light for the plants to photosynthesize. In any case, whether you're a plant or a bacterium, it's very important to have good water circulation to distribute the oxygen, carbon dioxide, and nutrients (including ammonia) around the tank.
10g since 4/18/2012; 10W x2 CFL; Fluval U2. The Fraternity of Dirt