Upgrading from Windows 98SE to XP?

I was thinking about purchasing Windows XP Upgrade. I have one question though. If I need to reinstall XP, since I will have an upgrade of XP, will I have to first reinstall 98SE and then the XP Upgrade or does Microsoft use some technology that will let me simply insert the 98SE CD during installation of XP just to verify I have the License for 98SE to use the XP Upgrade version?