There's a number of options at your disposal po' ,the question is which road to travel
1)-Use symantec's downloadable removal tool before attempting anything first as it can in some cases break systems..lol..,remove the rest of the goodies that hp were kind enough to let you have

,once system is cleaned up,untick hybernation box,not sure if necessary but set page file to none,reboot to safe mode & defrag & disk clean up,registry clean with ccleaner,reset pagefile to whatever size tho it would be best above 1GB,i've got 1gb ram & set my pf to 2gb,then rebbot back to windows,install your most used programs first,then the others,after that lot head to ms & don't leave till fully updated. once everything is back to normal use disk imaging software to make a complete backup to another hdd,the image can go onto a disk that's smaller so long as the data does'nt exceed the drive's capacity,this link is to a free imaging software,i don't know how well it works as i've never used it,for other imaging there's acronis 9.0 or above or ghost.
WWW Link2)-create recovery disks if you have'nt already(should be in "pc help & tools or just poke around the all progs list),then if you have a spare hdd test to see if the disks work,you'll need to remove the original hdd & set the secondary to master for this operation ,if all goes well,make some copies of those burned disks & put em in a safe place,then get a RETAIL copy of xp home or prof & load it onto whichever hdd you want this will free up some GB as there won't be a FAT recovery partition or any junk,again load most used programs first,update,defrag & use imaging software to make a complete backup to another hdd.
That's pretty much it use imaging software to create backups.
ps: it may not be necessary to make those recovery disks as i think's it's possible to use any xp home disk to re-install using the original OEM key on your sticker at back of machine ???
pps: been in your situation so everything i've said about imaging i've done,i also got me self a retail copy of xp prof onto a large hdd,made an image for recovery purposes & kept the original 40gb xp home as a spare in a cupboard if i ever need it,if all goes to custard i can be backup & running in the amount of time it takes to switch cables,to image say 200GB of data from one hdd to another it takes around 2-3hrs at a guess,either way a lot faster than deleting,installing,updating each time the shit hits the fan