Performing a Windows XP in-place upgrade is pretty straightforward. To begin, insert the Windows XP CD into the drive, restart your system, and boot from the CD. Once the initial preparation is complete, you'll see the Windows XP Setup screen (shown earlier in Figure A). Press [Enter] to launch the Windows XP Setup procedure. In a moment, you'll see the License Agreement page and will need to press [F8] to acknowledge that you agree. Setup will then search the hard disk looking for a previous installation of Windows XP. When it finds the previous installation, you'll see a second Windows XP Setup screen, as shown in the screenshot.

This screen will prompt you to press R to repair the selected installation or to press [Esc] to install a fresh copy of Windows XP. In this case, initiating a repair operation is synonymous with performing an in-place upgrade, so you'll need to press R. When you do so, Setup will examine the disk drives in the system. It will then begin performing the in-place upgrade.
Thats it! Make sure that after you perform an in-place upgrade or repair installation, you reinstall all Windows updates.

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