Mark,
If it is a RETAIL version (not OEM) of hte OS, you can legally transfer it
to another machine. All that you need to do is totally remove WinXP Home
Edition from the computer and then instlal it on hte newer one.
When you go to Activate, if it refuses, just call the toll-free number shown
on your screen and explain what you did. They will give you a new Activation
number to type in and you will be "good to go".
However, to avoid what you might have gone thru iwth your first installation
attempt, I highly recommend the following:
Make sure that the system will handle XP. I recommend that you run the MS
WinXP Upgrade Advisor BEFORE attempting to upgrade your system. It will
identify any anticipated problem areas that you'd need to address prior to
successfully upgrading to WinXP.
Go to
http://www.microsoft.com/windowsxp/home/howtobuy/upgrading/advisor.asp
to get this free utility.