George,

There is no reason that you should not be able to use the Upgrade version
to install XP Home as a parallel operating system on your new hard disk
and to multi-boot between the two systems.  Note though you should still
retain your Win Me media as this will be needed if at any time in the
future you need to reinstall XP which will ask you to insert the Win Me CD
to verify your eligibility to be using the upgrade version.  Removing Win
Me later shouldn't be a problem.  All that will be required is to remove
the entry in XP's boot.ini file that offers you Win Me when booting after
which the Win Me files can be deleted.

Before upgrading Win Me it is advisable to first run the XP Upgrade
Advisor even though you don't actually want to upgrade your Win Me system
but instead clean install.  The Upgrade adviser will help though identify
whether you are likely to have any hardware problems with the new XP
installation.

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.

You may also want to read Gary Woodruff's article on upgrading to XP at
http://www.aumha.org/win5/a/xpupgrad.htm
--
Mike Maltby MS-MVP
mcmaltby@hotmail.com