I format and reinstall XP pro every couple of weeks ( cause i have a tendency to collect too much crap) I use the 6 floppy sytem and then the cd. I have never had a problem--if i may make a suggestion,,don't allow auto updates as M$ updates are 80% fluff that you don't need for security or stabilization you can disable (I learned this here on another post) auto updates by going to control panel click on administrative tools, then on services then services are listed alphabetecically <<(spelt wrong) highlight, choose properties and change to manual---then when you update you can pick and choose your updates.
as an aside this is where you also can disable "messenger" to stop those annoying popup ads