mbpark,
If you know how to tell any edition of XP to install someplace other than C:\Windows, let me know. I certinaly didn't see it anywhere in the install.
UT,
But yeah, running an upgrade against an existing installation for ANY MS OS is just aching for trouble. Not to mention it leaves all of the collected cruft to cause more trouble.
Getting XP Pro for $140 (with a system, that is) isn't bad, assuming you get a CD.
Seeing as you're already sitting on the XP Pro upgrade disc, try to recover what data you can off of it and just wipe the partition.
The only real bonuses to XP over 2k for me are the pretty logins, visual styles, and hella faster booting.