Frankly, unless there are compelling reasons for doing so, I would not recommend upgrading but rather going for a clean installation. If you only have the upgrade version, don't worry - the system will ask you to insert your old CD to check then will proceed without problems. At this stage, I recommend that you format your C: drive, set your BIOS to boot from CD, reboot with the XP CD in the drive and follwo the on-screen instructions.
PS I tried the over-write option myself recently - had all soprts of problesm. DId a frsh install clean as a whistle.