Friend of mine runs a 32mb pentium 166 with XP. The Celeron 800's will have no problem. However you will not notice anydifference between your HP and the Dells. The differnce 'twixt an 800 and 400 processor will not be noticed by mortals so I would reformat your computer and stick with 98.
ps...how does he manage to sell a computer with XP home (£70 on it's own IIRC) for 100 squid? ;-))))