Here's what I generally do when I format XP, in this order generally:
install windows
activate windows
turn off system restore, remote help, set system to performance, turn off auto update
turn off messaging service
remove Windows messenger and MSN explorer
get all critical updates
install Norton Antivirus and update
get video and audio drivers
Defrag
Get the following:
spybot and adaware and update them
Azureus and the latest JRE
K-Lite 2.6
Windows Media Player 9 and K-Lite codec pack
Daemon Tools
Nero 6
Alcohol 120%
Mozilla Firefox (and make it default browser)
Get Flash for Firefox
Winrar
Quicktime
Real Player (if I need it)
Defrag
Install games
Defrag
Run spyware programs