Three options -
1. Fdisk both partitions, recreate as a single partition. Pros - free. Cons - you lose all of your data on both partitions (backup first), time-consuming to reinstall all of your software.
2. Buy a copy of PartitionMagic 8. This will allow you to delete the ME partition, and 'extend' the XP partition into the free space. Pros - simple and effective. Cons - RRP price about £50 - a lot to pay if you only plan to use it once.
3. Buy another hard drive, fit it alongside your existing one. Pros - you get real extra storage space, you can keep ME if you want to, not much more expensive than a copy of PartitionMagic. Cons - a bit more expensive than a copy of PartitionMagic for a useful size drive.