Raw Data,
With winXP, you can do a fresh install of WinXP right on top of itself without losing your data or even needing to format. That is the beauty of it.
The main need for partitions was because OS's could not handle drive volumes, but that is a thing of the past.
Lets say you have WinXP on one partition and you format that partition and reinstall WinXP, you will still have to reinstall all your programs so they will work again. There is no advantage that outweighs the added complexity of multiple partitions. (Unless you are dual booting, but even then I just use two different Hard Drives for boot boot systems.)
Take Care,
Richard