Yuh just gotta luv reformatting hard drives and re-installing all that software from scratch don't you?

Ain't Microsoft wonderful???? The number of days I have wasted doing that
What I do is use a disk imaging program such as Norton Ghost or Image for Windows. The later is a shareware program although I have never been able to image the system disk using the Windows variant of the program - if you purchase the program, it comes with a DOS variant that allows you to create a bootable CD and that works fine for imaging the system partition (the Windows application works fine for imaging non-system partitions - see later discourse on archiving video projects).
Anyway, rather than using restore points like Ron suggested (good way to chew up disk space! I disable them personally). What I do is format the system drive, load XP and any applications that I consider "safe" and then take a snapshot of the system disk using my chosen disk image program (I have used both of the above - I use Image for Windows exclusively these days). I do this by writing the snapshot to a separate hard drive partition although both Norton Ghost and Image for Windows allow writing directly to CD/DVD. But I consider it faster and more reliable to put the image files onto a separate partition (if you have a single drive then partition it - otherwise write them to a partition on the second hard drive) and then when I am happy with the image I have taken i.e. the computer is behaving in an acceptable manner

, I transfer them to DVD/CD later using Nero. I always leave my last set of image files on this separate partition because it is faster to restore the image from hard drive rather than CD/DVD (naturally

). Placing them onto CD/DVD just gives you reliable backup in case of losing the hard drive that holds the image files.
As I install/reach a point that I consider "stable", I take a new image snapshot of the system disk. Whenever I want to load a new application or whatever that I think I might want to keep, I first restore my system from the image backup (thus deleting any crud that may have accumulated by surfing the Internet or loading demo programs etc) and then install the new application - if it doesn't work quite the way I wanted I just restore from image files again and I am back to a "clean" system
I take this approach with every computer that I own now - it is especially handy for the computer that the kids use because when it starts doing "funny" things I just restore the system disk from the last image
I use the same process to backup/archive my video projects - I keep all my project material on a single partition and when I have completed the project I take an image of that disk partition and write it to DVD.
As long as you use good quality DVDs for your image files then you have reliable, safe storage.
Using a disk image program such as Norton Ghost or Image for Windows has saved me days and days of time - plus you don't have to re-activate XP everytime you do a restore (make sure you snapshot
after activation of course!

).
Peter