Sure, it is possible as long as the XP disk is a retail license version and not installed on any other machine. That said, understand XP is 10+ year old technology and not designed to take advantage of today's hardware, and more importantly, today's security environment. SATA drive support is not, for example, native to XP so special drivers need to be installed from a floppy disk during the XP install. And Win7 is much more secure than either XP or Vista.

Rather than go backwards in time, I would suggest you move forward and move to Windows 7 instead. See the Windows 7 Upgrade Advisor to see if your machine will support Win7. It will still take some time to get used to, but in the end, your machine's performance will be considerably better, and your computer and you will be more secure.