Yes, I believe it will upgrade but the following is the best way to install XP.
If you run multiple hard drives, I recommend pulling the power plug (disabling them) on all but the drive you wish to install XP on.
Shut down your computer. Press the power switch to turn the system back on and directly after continuously press the delete (F1 or F10 depending on your system) key to get into the BIOS.
Select “Advanced BIOS Features” (use arrow keys to highlight, press Enter).
Change the boot order to boot to CDROM first and then to HDD-0 second.
Then press F10 to save and exit (put the XP CD in before you exit).
After the reboot, press any key to boot to CDROM, and the XP setup should start.
When prompted, press enter to install XP. It will highlight your previously installed O.S. or partition. Delete all partitions shown and then create a new one. The XP setup will ask what type of file system format you would like to use (Fat32 or NTFS). The choice is yours but the popular and more stable format is NTFS. It will then show you the size of the partition (usually the size of your hard drive), format the partition (erasing the old O.S in the process), and installs a fresh copy of XP. The XP setup may reboot the computer several times. There is no need to press any key to boot to CD during this process. After it’s all done, you can reboot, get back in the BIOS and set the boot order back the way it was. I usually set the first boot device to HDD-0 and disable the rest.
Go here for a more detailed description:
http://www.cyberwalker.net/columns/aug02/010802.html
Good luck!