Normally an upgrade would move old system files and such into a folder called Windows.OLD located at the root of the drive (say C:\). It sounds like one of two things happened:
1.) The installation failed to remove the reference to Windows XP, which should no longer be there.
2.) A parallel installation was created with XP along side Vista as a result of a glitch.
Choosing "start in previous version of Windows" during boot shouldn't hurt anything, and would tell you whether you still have a working copy of Windows XP installed or not. Thus, I might give it a try. Aside from that I would browse through the Windows.OLD folder and copy out any files you want to save (be thorough if you don't have backups) and then perform a disk cleanup, which should remove that folder. (If not you can delete it yourself.) On the other hand, there's no real harm in leaving it as it is, aside from the extra hard drive space being used, so if you're leery of deleting it you can let it be. The choice is up to you.
John
I did a upgrade from XP to Windows Vista home premium on my son's computer.
Now when he starts the computer it comes up it gives 3 choices. "start in previous version of Windows" "Start in Windows Vista" or start in Microsoft recovery console.
I appears by the used gig on his hard drive that the Vista upgrade leaves the old XP and his files and programs on the computer and gives you a choice.
Also when doing a disk clean up it has " previous Windows installation and is 33.4 gig in size and the box is not checked.
We have not tried to open anything but Vista as we don't know what it would do and I don't want to screw things up.
I have only done one other Vista install, that was on my computer as a clean install. Has anyone else done the upgrade with these same options coming up?
Also what if we do choose start in Previous Winows version, would it mess anything up?
Thanks
Wayne

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic