It will work fine. Trust me. I turn over the water about 10x per hour on all my tanks except for the ones that have canister filters, and I've kept gold rams (same species as GBRs), apistogramma, Bolivian rams, keyholes.... they all do fine even though they are small cichlids.
IMO the Penguin 330 will give you the perfect amount of turnover for a 38 gallon. If it were a canister this would be totally different, but in my opinion HOB filters are always overrated with regard to the tank size guidelines from the manufacturer.
I agree with Blue- the older models are better. I'm not really a fan of Penguins anyway (but that's ok, it's all a matter of opinion), but the newer models have that stupid mid-level intake strainer. It doesn't do much good IMO, and it makes the intake tube look even worse, lol. I don't think the 330 has this. Oh, and if you're wondering- the 330 uses the same cartridges as the newer 350 so no worries there.