you can do format install from XP cd, you don't need a floppy boot disc unless you have a (crap) hookey, non booting XP cd.
(good) hookey, booting discs are fine i'm reliably informed
do a complete reinstall not an upgrade.
basically, back everything up as mentioned, insert XP cd & boot pc from cd (you may need to alter the boot order in BIOS to achieve that*), follow instructions on screen, it's a piece of piss
*press delete during boot to access BIOS & set CDROM to be first in boot order in "basic CMOS set up" from memory.
ps. you'll want a lot better spec than that above to run nicely in the real world. that's MS's over optomistic spec to part punters from their money.
i'd suggest 500/600PIII, 128 MB RAM (256 much better) as minimum.