See if the solution at 'Blank Activate Windows page in the Windows Product Activation Wizard' click here is any good.
Yes, it would be ideal if you could do a fresh XP reinstall. If you only have an Upgrade version, you don't have to install WME first. During the start of the fresh install, the XP Upgrade will only ask you to briefly place the original WME disc in the optical drive. Once it's satisfied, just replace the WME disc with the XP Upgrade disc & install as normal. G