Some liscenses are for 1-2 CPUs, meaning you can have the OS installed on only that many computers at the same time. If you've got one that's only good for 1 computer, then you'll have to put a different OS (which I believe you said you're doing) on your current one, and install XP on your new one. When you try to activate it, it might just let you...I reinstalled XP Home on my last computer at least 3 times, and it activated without problem every time.
When I reinstalled XP Pro on this comp once (changed my motherboard), it gave me a message that I had to call in get a key to activate it, because it had been activated too many times. All you have to tell the guy is that the copy you're using is only going to be on one computer...tell him you had to reinstall 'cause you made a lot of hardware changes...he'll give you a key that you type in and it activates XP for you legally. While you're at it, you can ask him/her how many computers you can use this same copy of Windows on, you might be able to avoid putting shitty ass ME on your old comp...or you can pay to get a liscense to use it on the old comp.