It doesn't hurt to have it either. It cleans, fix, maintain, optimize, protect, and does other maintenance stuff to your hard drive to keep it clean. I have Norton SYstemworks and at times, it does a lot more than what Windows XP provides which is great.
But to answer your question, no you do not have to have it. Windows XP have Defrag, Disk Cleanup, and you can delete Temp Internet Files and cookies as well.