personally i wouldnt recormend installing XP on top of any other OS. a clean install is gives a much better installation, since you dont inherit all that old mess
normally a MS OS upgrade will install onto a blank partition, just to long as you can show to the installer that you have a suitable version of windows that you are eligable to upgrade from.
i *havent* tried this with XP, but it should work, IF the system is the same as it used to be:
format c:
format d:
install win98 onto c:
then install XP onto d:
XP at this point will configure the dual boot options for you.
since win98 is already installed, winXP should detect it quite happily, so it will know you are allowed to install it as an upgrade, but *should* still allow you to select a seperate drive as your place to install it.