I recommend you go to Microsofts website and order the SP2 disk through the mail. It takes about 2 weeks to get it, but it is worth ordering just to have the update without having to download it. I have a copy at home. This is just a time saver.
If you care about losing info back it up. However, if you are scared of a possible virus this may be a bad idea. Check your BIOS FIRST. I like the boot order to be Floppy (if you have one), CDROM(rw/dvd), and then the hard drive. Then just boot from the XP CD. To do this I think you have to hit the CTRL key when the system boots and gives you the option to boot from the CD. This is easy to miss. When you get into the setup make sure you do a new install. I would completely erase the partion and set up a new partition and a new logical drive. XP is a resource hog and I have my 80 gig drive set up as a one partition with one logical drive. Download all the updates to get rid of the security holes microsoft has already patched. I use SP2 but it does have some quirks so I now use Netscape browser and the netscape mail program. Normally I use IE, but at times Netscape works better for certain tasks.
I just reinstalled mine because XP ran out of space in a 10 gig partition. I didnt think that would be possible but it was. If you had a 200 or 300 gig drive you might want to split it up just a little if you want to separate the operating system from large download files or video files. There are some programs that are incompatible with XP like MS Office Suite 97.