Well you don't really need to perform a full backup just your data which you should be currently doing in case something goes wrong and you loose everything.
To reload the system you should first use a wiping utility available from most of the HDD suppliers you can download Disk Wizard Starter Edition from here to clean the drive by writing 0's to every sector and then with the Install or Recovery CD you can reinstall your OS and any other Software that you have bought. If you have a White Box you'll also need all the Hardware drivers that where supplied with it so you can install the correct drivers and the most important thing is that you'll need to be able to read the COA {The Windows XP Sticker] on the side of the case as this has the Product Key which you will need when you reload. Because of the way that they are made they can be very hard to read at times.
After you have wiped the HDD all you then need to do is drop in the Install/Recovery CD and apply power and follow the steps that you are asked to follow. If you have a fairly new computer within the last 3 years that is all that should be required but if it will not recognise the CD ROM you'll need to go into BIOS and change the Boot Sequence so that it boots from the CD before the HDD. If you do this when the computer restarts during the install of XP do not press any Key to Boot from the CD as that will just take you back to the starting point.
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