This is probably not what you want to hear, but I use this method.
* I still have my original XP installation and driver disks.
* I also have XP SP2 on a CD, (many will slipstream XP and SP2 onto a single CD which is good).
* I regularly back up to CD all of my important files, eg documents, photos, music, videos etc.
* I also back up details of my email settings, as well as my Address Book and other personal details.
* I make sure I know where my internet setup CD is and keep that, with any other instructions in a safe place.
* Every program I have downloaded and installed from the internet, I have saved the install file to a separate folder on my hard disk, and I have backed that up to CD.
If ever I needed to re-install, (and I am fortunate that I haven't so far), I will do a clean install of XP and SP2, and then make my way through my other programs one at a time.
Other people have different ideas, so I expect you will have many options to choose from.
I hope this helps.