Win Me can be upgraded to XP, both Home & Pro although it is advisable to
first run the XP Upgrade Advisor to check what applications may first have
to be uninstalled and then either reinstalled or even replaced following
the upgrade.  Some users will tell you that you should clean install XP
but that isn't really necessary, especially where you wish to retain your
existing installed applications since upgrading from Win Me to XP is in
effect a clean install of the operating system as, unlike an upgrade from
say 98SE to Win Me, you are upgrading the underlying system from one using
the 9x kernel to one using the NT kernel.

The XP Upgrade Advisor (UpgAdv.exe) can be downloaded from
http://www.microsoft.com/windowsxp/home/howtobuy/upgrading/advisor.asp but
note that this is a large program being around 32MB is size.  If you only
have a dial-up connection it might be worth looking for a magazine that
has included the Upgrade Advisor on their cover CD. The advisor will give
you a clue as to any XP drivers required that aren't on the XP CD and
programs for which you will have to obtain updates.  Some applications
will have to be uninstalled prior to upgrading after which they can often
be reinstalled although in some cases the application will first have to
be upgraded to an XP compatible version.  The Upgrade Advisor is also
included on the XP CD.

For a more extensive discussion of upgrading see Gary Woodruff's article
at http://www.aumha.org/win5/a/xpupgrad.htm