Xp is much much better than 98SE. Its more stable and almost never crashes. PLus theres new features.
If you have a full original 98SE installation disk, you can upgrade to XP with an upgrade disk, otherwise a full copy of XP is needed (Recommended method).
You won't lose anything from your old PC if you back up all your stuff onto removable media such as CD-R's or even a second hard drive.