WinMe cannot read NTFS partitions, so you'll have to completely repartition and format the drive as FAT32.
As for the database... Probably, but you'd have better luck checking the Oracle website. If they work on NT4/2000, chances are real good they'll work on XP. Not sure why you'd want them given their age and that MySQL and PostgreSQL are out there, but it's your system.
I have P4 system with XP loaded on NTFS drive, now that I need lesser version of windows like WIN ME, how do I go about uninstalling WIN XP which was not upgraded by directly loaded. I would also like to know whether I can use ORACLE Ver 7 or 8 on my WIN XP system.