Actually, you do not have to format to upgrade from 98 to
XP. However, a so-called "clean install" is usually a
good idea, since it eliminates junk and gets you off to a
good start in XP, with no legacy issue form 98 or earlier
systems. XP will do the formating for you as part of the
installation.
As for Office 2000, it will run under XP. In fact, Office
97 will run under XP. Be sure to get the latest service
pack for your version of Office and install it soon after
installing Office. This advice would even apply to Office
XP. Alway check for updates and/or service packs.
Do not forget service pack 1 for windows XP, as it has
some important patches! I would suggest applying SP-1
before installing any other software or any new hardware.
Finally, please run the Microsoft Upgrade Advsior BEFORE
installing XP, even if a clean install. It will identify
any harare issue, such as too old a BIOS. It will also
identify any software that should NOT be re-installed,
such as Norton 2001 or earlier, Easy CD Creator 4 or
earlier, Outlook 97, etc. It will also identify software
that requires patches, such as Easy CD Creator 5. This
advisor is free from Microsoft and helped me avoid several
problems.