John,
Yes you will need the serial number and you will need to activate it
online or by telephone.
If you keep formatting your HD for hobby then you can follow these steps
to avoid activation:
Double-click My Computer
Double-click on the "C" drive
Go to the C:\Windows\System32 folder (you may have to click on the link
that says "Show The contents of this folder")
Find the files "wpa.dbl" and "wpa.bak" and copy them to a safe location.
You can copy them on a floppy drive or burn it onto a CD or DVD.
After you have reinstalled Windows XP on your reformatted hard drive,
click "No" when asked if you want to go ahead and go through the
activation process
Reboot your computer into SafeMode (you can either press F8 as Windows
is booting up to see the Windows Advanced Options menu and select
SAFEBOOT_OPTION=Minimal or follow the instructions in Starting Windows
XP in SafeMode
Double-click My Computer
Double-click on the "C" drive
Go to the C:\Windows\System32 folder (you may have to click on the link
that says "Show The contents of this folder")
Find the file "wpa.dbl" and "wpa.bak" (if it exists) and rename them to
"wpadbl.new" and "wpabak.new"
Copy your original "wpa.dbl" and "wpa.bak" files from your floppy disk,
CD or DVD into the C:\Windows\System32 folder
Restart your system (if you followed the directions in Starting Windows
XP in SafeMode you may need to go back into MSCONFIG to turn off booting
into SafeMode)
This method only works when you reinstall the XP on the same system as
before. YOU CAN'T USE THIS METHOD TO INSTALL ON ANY OTHER SYSTEM.
HTH