changing OS / hard drive question

hi
i am having probs with 4 yr old dell - freezing cursor - now the drives won't read cd's. other than that, it's working. dell suggested i wipe it and reinstall. if i reinstall - it will be XP (ME is currently on the dell)
question: i need the data on the current hard drive. Can i do this?
take out the drive. replace with a new drive. reformat the dell with XP - put this harddrive back in with my data? I know i can have 2 hard drives but my question is, will the XP os read the data from the original ME drive? any suggestions and advice welcomed.
thanks!!

XP wont have any problems reading your ME drive if you install a separate XP drive, but first I'd try upgrading your curreny ME installation to XP using your XP disk, you wont lose any data bar your old OS and it may fix your problems.

hi
i have no clue how i got a worm and a virus on this older pc or how long they have been here, but i installed AVG to test, this morning, and it detected .pif (it's a worm i think) and nasty Trojan.Downloader.Realtens.B
i tried several ways to clean the dell - and each time i deleted it came back - so i disengaged RESTORE and booted in Safe Mode - ran AVG - it said it healed one and deleted one and my C drive was clean. when i check my avg log (i ran it about 8 times) it said virus still there the first few times but then it said HAMSTER warning hidden extension: Healed OK.
i never knew that was on there. anyway - i reengaged SYSTEM RESTORE - got out of Safe Mode - ran AVG and the dam things were back! after finishing the scan AVG said it deleted ONE and Healed ONE - 0 in vault 0 on drive. so i have no clue if this thing is coming back because on the log it says hamster healed and doesn't mention trogan. if i ran another test it might say it detected and cleaned again.
could it be this AVG? ps. the last logs said, in this order:
trogan: still infected
trogan: put into virus vault
that's the last logging of the trogam - after that all it says is the hamster has been healed lol
any thoughts?

PSS: so i can run XP over ME and update and it won't lose my files?
also - dell said my rewritable drive needs to be replaced because now the light is constant on and the tray is jammed. won't open.
this is a mess lol
im happy it's not THIS pc that im on now - with all my current work and files etc.
Im going to pick up another cdrom tonite and install it and see if that fixes that prob. in all this time today, it didnt freeze once! which was my original symptom. can the worm or trogan have done that?
confusing huh?