|If the "bootleg version" is working correctly & the only problem is it's not "genuine", all you really need to do is change the product key to a legitimate one, then activate it online..|
If you want to wipe the drive & start from scratch, that's your perogative. Everything can be done using the XP disk. Just boot off it, wipe out all current partitioning, create a new partition (or partitions), format as NTFS, then proceed with the installation. You will need drivers for the motherboard chipset, video, audio, network, etc., not to mention SP3, IE8 & all the other Windows Updates. Also, do yourself a favor - do NOT install any Norton/Symantec product. Just use Microsoft's free Security Essentials software & XP's built-in firewall.
If you have a SATA HDD, let us know because there's a step or 2 that MUST be taken to get XP to install.