it is possible to have two sets of the same OS on a hhd on the same partition. to do so boot up with the restoration cd. then delete all parttions on the hhd. then make a new one using the NTFS format.
This is possible but its frowned upon by microsoft, its poor practice to do that, because of problems later on.
Boot from your XP CD. Then start an install as normal. Start a fresh install. When you get to the screen where it asks where you wanna install it, there will be options to delete the partitions, highlight each partition and delete them, then create new ones by pressing C, i think, then install as usual.
This should help ya, notice the screen on pic 6 for removing partitions etc http://www.microsoft.com/windowsxp/u...p/install.mspx