On windows XP I believe you can accomplish what you want to do by doing a recovery which is basically re-formatting your hard drive. If memory serves, there are two types of recovery available. One is called a destructive recovery which wipes out everything and you have to re-install everything including your operating system. The other I believe keeps your operating system but everything else is lost.
I do a destructive recovery about once a year, but most of my geek friends advise doing it every six months. It wipes out all the accumulated errors that have collected. Of course, you will have to re-install all your programs and all appropriate updates to them. This usually takes me about three full days with my system. Be sure to backup your data files, but don't try to backup your program files. Reload those from disc or download from the internet.
I backup my data files to an external hard drive by copying them rather than using a backup program. I also take the time burn copies to DVD for storage off site. Just in case of a fire or other catastrophe. Our hurricane season lasts nine months.
You might want to consider upgrading to Windows 7 if you're only running XP-Home version. I kept XP-pro on my laptop because some programs I like aren't compatible with Windows 7.