Yes, if you boot from the XP install disk, the installation process will do it all for you.
You have backed up all of your data which is on the System drive(C:)? (Photos, music, docs etc.)
You do have the PC's drivers CD somewhere?
You are prepared to install all the applications and personal tweaks from scratch?
You may have to phone Microsoft to activate XP again.
Using Acronis to make a clone and then restore the clone to your new HD, is a much faster and more elegant way, but the method is another story and not what you asked.