Software

You could use that Disc and Product Key only if you have a Suitable version of Windows with a Backward Compatible License which allows you to install older OS's.

You should go out and buy a New OEM XP Setup Disc.

Col

OEM disks need an OEM product key. One thing would be to buy a referb computer (about $100) and then use its CD and key on your new computer and then NOT use the referb as a windows computer. Referb computers come with a refurb key.

I do have 2 online retailers in mind that offer Xp Pro OEM.

If I do attempt to install the XP Pro CD I have and it doesn't validate with Microsoft, if I then buy the OEM CD on-line all I have to do is then reformat the HDD using my new OEM CD correct?
Thanks.

Because you have XP Pro, and not home for example, the setup program will ask you for the XP key and will not go any further. It will also depend on the Vendor (Dell, HP, Gateway, etc.) some OEM CD's will check for the manufacturer before setup (or restore) and will refuse to install. You could always call M$oft and make up a story about your original PC being not functional, and you had to pay someone to rebuild it, and you want to use the same OS. Sometimes they will give you a new key to use. You could try to install an XP home version, and purchase an XP pro upgrade, it will cost less that a brand new full version.

The OEM license states that that copy of XP is only for installation on the PC it was originally installed on. Legally, the license is not transferable to another PC.

I bought over 100 copies & license of XP OEM for computers we were building so when new hardware came drivers issues, it was very time comesuming , we are going with windows 7 but if you want XP pro and have to buy a new copy get XP 64 bit still some of thoese aroung

...a branded "OEM Windows XP" disk and licence vs. vanilla MS ones.

Microsoft sold and you can still find on the market, Unbranded OEM disks with relevant key for system builders to use for PCs built from component modules.

Whereas OEM brands were sold licences and then shipped PCs with rebuild disks.
these branded disk have to be used with keys issued to that manufacturer and often these builds look to the manufacturers specific BIOS or other identifying hardware.

But as others have said re-using either OEM type licence on a new build PC is against the T&Cs. And hence MS are likely to make it more difficult to re-activate or recognise the licence as genuine.

As already stated in other posts, your original OEM disk was only licensed for the original PC that it was loaded on. However, you may experience other problems.
Firstly, the early versions of XP could not recognise a HDD bigger than 128Gb. So you would have to start by loading up Win XP on a small disk, (then I would activate the OS with Microsoft), then applying SP2, and then cloning to a larger disk, at which point you would probably have to re-activate with Microsoft again (assuming the first one was allowed).
A second method which sometimes works is to put your original hard disk (if is is a working OS) into the new machine (be sure to have a backup or clone) and see if you can get it to boot up and then apply new drivers etc. Again, you should reactivate with MS (it is more likely to be allowed if MS sees that you have the original HDD). From that point, if all went well, you may be able to swap the HDD with the freshly loaded one that you created in my first suggestion above, as you have by now activated the old HDD with the new motherboard etc and in this second activation you are now only changing the HDD. (Reactivation is most likely to work if you don't change everything at once.)
Quite frankly its hardly worth the trouble. If you really want XP, go and buy a good used machine with an OEM license and use that machine.
A final warning: if you buy XP online you have no guarantee that it has not been used and activated already.

Legally, you can't use that machine unless the other machine died. MS will let you activate that key on a 2nd machine but ONLY if that key is not being used on the original machine. You MIGHT get the new machine to activate even if the original key is working but MS usually catch up with you and you will get illegal message. May I ask why you have to use XP? It is REALLY dated and full of security holes. Have you consider running Windows 7 Pro/Ultimate but run XP compatibly mode to accommodate your old program? After using Win 7 for two years, I REALLY HATE working on XP.