Can you connect the machines over a network? If you can, XP includes a Files and Settings Transfer Wizard that will copy over you settings and files. I think it can also work with CD burners, but is easiest to use through a network.
As for transferring WinXP itself to a new machine, you will have to talk to Microsoft as the new product activation may not allow that. Upgrading a machine doesn't seem to matter to them, but I have read stories about people who had trouble when trying to move XP to a new machine.
goates