OK, I use ghost at work all the time. Keep in mind, I use the corporate version so the home version might be somewhat different.
Ghost can image your entire drive or individaul partitions whichever you select. Empty space is not imaged. You can always go from a smaller dirve to a larger drive. It is possible to go from a larger drive to a smaller drive as long as there is enough room for the data in the image. Example, I have an image of a WinXP base installation. I took this image from a 20 GB drive. I was able to push this out to a 10 GB drive and it work fine. Yes, I do have appropriate licenses for each install.
The only problems you may have with ghost and reimage is if you try to image WinXP from one machine and put it on another. XP may give you fits about the hardware change. If you are simply upgrading the HD in your existing machine you shouldn't have any trouble at all. If you are using XP Pro, you can always use sysedit with ghost to image the drive and put in another machine that will require reactivation.
Imaging is much better than copying files because A) it takes less time and B) it works. If you try and copy files, you will not get your registry settings and many of the system and hidden files that exist on your drive. Also, you can not copy partition information. You would have to manually set up your partitions on the destination drive first before trying to copy. There is no need to partition or format a destination drive when ghosting. It does this for you automatically.
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