1. The article [Q315341] describes how to perform an in-place upgrade/repair, or reinstallation to the same folder, and discusses the procedures and obsticles which may be encountered during the process.

2. Supplemental reading:

a. "Data Loss May Occur After Reinstalling, Repairing, or Upgrading Windows XP (Q31236Cool."
Note: If WinXP came preinstalled, the information in the article could apply to you. Check and see if there is a file named Undo_guimode.txt resident in the Windows\System32 folder. Note that will apply each time an OEM restore disk is used.
b. "You May Lose Data or Program Settings After Reinstalling, Repairing, or Upgrading Windows XP (Q312369)."