I have some additional hints:
When I do a clean install, the first thing I do is gather what I need. I get the manufacturer disks or burn backup disks from the restore partition (if you have a restore partition, which is likely, you can restore the factory image from that, but burn the disks and keep them anyway). If the manufacturer disks or restore partition don't exist, a Windows disk is necessary. Go through your start menu and the list of programs in the control panel's uninstall programs feature (some programs are listed on one, but not the other), and list every program added to your computer. This is an important list, so think hard and take your time. If you are not using manufacturer disks or partition, go to your manufacturer's support site and find all updated drivers for your machine (in fact, you might want to get them anyway, so that you can update them immediately after the clean install).
I divide my programs into two lists: paid programs and free programs. The reason I do this is because free programs seldom need to be activated or installed with activation numbers, but paid programs often do. If the program in question is downloaded from the internet, find it online and download the latest version's install file (make sure it is an install file). Keep these files in a folder you set up for this purpose. If an install file cannot be obtained, then make a txt document with a list of the urls you will need to reinstall the programs. Make it a txt document because you may not have your word processing program installed when you use it.
Gather all of the disks from programs you have installed from disk. If you do not have the disks anymore, then see if the manufacturer will allow you to download an install file from their support site. Important: gather up ALL of your necessary numbers. This means the Windows install information and the information you need to install added programs. Make sure you have accurate numbers for every program. If a program uses an unusual activation method, such as Roboform (you must log into the website after you install it and provide your order number), then make sure you have what you need to do this. Take note of the steps needed. Make a txt document that contains all of this information and save it. Print the information out, so that you can refer to it as you are installing.
Make a list of the steps you need to take when doing the clean install. Print it out. Use it as a checklist when you are doing the clean install.
The more time and energy you take preparing for your clean install, the smoother it will go. It is both a time saver and comforting to have those lists right there with you when you are working. I could go on and on with tips and tricks, but you can plan out any personalized steps yourself. Take note of anything that you wish you had done differently, and plan to include it the next time you do a clean install.
Last of all, don't forget to make a full backup of your C drive immediately after you have finished the clean install. You can use this as a base later, if you do another. Don't go on the internet for anything except updates before you make this backup. This keeps it as clean as possible.
Yes, you can upgrade to another OS at any time. If you have the money, and you are willing to spend it, it is not a bad idea. Windows XP is not dead, though, and there is no reason to simply throw it away. If you do buy a new computer, then do a clean install and give your old computer to someone who needs it.