Since there's an active (if dysfunctional) system already the XP installer will allow you to choose a different destination folder. That'll avoid many of the hassles of moldy remnants. Some problems can reside in \documents & settings or \program files which means they'd follow the new system. If you want to preserve things but get a fresh system, boot with something that allows you to modify the HD filesystem. Prefix those two folders with something, say "old_". Blow away \windows entirely. Then boot the CD, install, and you'll be free of the old system while preserving work files & settings you might want to scavenge.
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There are a vast number of people who are uninformed and heavily propagandized, but fundamentally decent. The propaganda that inundates them is effective when unchallenged, but much of it goes only skin deep. If they can be brought to raise questions and apply their decent instincts and basic intelligence, many people quickly escape the confines of the doctrinal system and are willing to do something to help others who are really suffering and oppressed." -Manufacturing Consent: Noam Chomsky and the Media, p. 195
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