There should be no problem with such an install. I've done a couple of XP "down-grades" over the past few years. I've just inserted the XP CD, and had the install program re-format the drive before installing. Make sure that you have all the XP drivers you will need for the various NICS, Videos cards, and other hardware FIRST. Usually the hardware manufacturer will have these available on their website. You will need a legal XP install disk with a verifiable product code. After installing make sure to get all of the latest OS updates from Microsoft.
Good Luck!
-Flame
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Here is an article, complete with some great "how-to's", by Brian Posey, should prove helpful!

http://searchenterprisedesktop.techtarget.com/tip/0,289483,sid192_gci1333513,00.html

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Hi, I'm Brien Posey. I wrote the article mentioned above. That article should tell you most of what you need to know for a downgrade. One more thing that I wanted to mention that I may not have mentioned in the article is that if you purchase a Windows Vista Business or a WIndows Vista Ultimate license, you are automatically entitled to a Windows XP Professional downgrade license. It's something that Microsoft started doing after they stopped selling Windows XP.

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