Hey Chris,
Yep, just keep XP, (unless your made of money), no you don't need to keep a monitor on it, (a KVM switch would be useful to save room), and just set up file sharing.
The best thing to do, is to create a seperate partition from your OS, and use that as file storage, (this is has to be achieved by reinstalling Windows).
Create a share, and Map it from your other PC, (My Computer, Tools > Map Network drive).
You need to keep it secure, so if you need help, start a new post in OS - XP - "XP File Sharing - Best methods & Keeping it secure?" so whoever replies can be useful to others.
David.
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