Well, if you have everything backed up and are ready to install Windows fresh then editing the Registry, or doing anything else new on the computer, shouldn't be too scary.

But I think too that a new install is the way to go.
I've never used OE, but assume that
How to back up and to restore Outlook Express data should help.
In addition to backing up data I have found it very helpful to have a list of applications that I want to install on a new operating system. Maybe it's just because I like lists to check off items done.
After you are sure that you have everything safely backed up boot from the XP install disk. There will be several somewhat confusing choices--you want the ones that use the same partition now occupied by the operating system and you want to first
format that partition (NTFS is best). The format essentially wipes out everything on that partition (the partition may be your entire hard drive). Then install XP. You will be back to whatever version (no service pack, SP1, SP2?) of XP and of IE you had at purchase time.
You need to have a firewall running unless you are behind a router; the XP firewall is fine.
Install your chipset, networking, and any other needed drivers. You may have these on a Resource or Drivers CD that came with your PC. Even better, you can download the latest from your PC manufacturer's web site. (Good to do this before you begin the new install.)
Do Windows Update multiple times until you have SP3 and all the additional critical updates. Then get IE8, if that's what you want.
You don't need an anti-virus (my opinion and practice) until you start venturing to web sites other than Microsoft's and other highly trusted sites. I think that Microsoft has finally done a 3rd thing right in the security line--
Microsoft Security Essentials gives anti-virus and anti-spyware protection quietly w/o hogging a bunch of resources. I now run it on XP, Vista and 7.
Oh, from time to time there are issues with mail notifications from this site. I suggest that you do not rely on them for threads you really care about.