I can speak from experience on this.
I upgraded to Vista 2.5 years ago (free offer thing) and ran the upgrade over a 100% factory install of XP fresh from the recovery partition. I know now that many of the minor issues I had were caused by a flawed upgrade procedure and the upgrade patches applied to bundled software etc.
In August this year I bit the bullet and clean installed (You can do this from an upgrade disk) and am amazed how quick and responsive it is.
Yes you will need apropriate drivers but gather as many as you can onto a USB drive first.
Not sure over your license question re XP