Reinstalling windows XP

Can a new installation on a machine already running XP be done without un installing the existing OS. If so how.

I don't want to have to completely reformat and do a reinstall of all the software.

The reason I ask is in trying do a system restore I get the error/message that the system can not be restored to the date I selected. It was suggested that I needed to reinstall XP. When I put my XP Disk in the drive it came back with the message that the version of XP currently running was newer than the version on the OEM disk supplied supplied by DELL.