You dont NEED to, but it's usually advisable. Winxp will let you install it again, basically its reinstalling windows but it doesnt screw up any information on your hard drive or your application/user profiles, all you need to do is windows update and get the latest drivers. Check out what MS says here and read the anandtech faq (before the faq guy attacks you!) here.
Basically, yes. There's a FAQ here at AT on keeping the old XP installation, but with that many changes, you're really asking for problems. Just back up your stuff and reinstall. If you have a whole lot of big AV files around, see if you can find a cheap hard drive with enough capacity to back them up - having an extra drive never hurts anyway.
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