yes, a system restore via your control panel is the first thing you should try. but you're not giving much info... what exactly did you delete? is windows xp even still working at all?
if it isn't or if a system restore doesn't help then you can indeed re-install windows xp over your current version without losing data files. it's not necessary to format your hard drive first (altough a clean install is normally the best thing of course). if it was me then i would first remove the hard disk and stick it in another computer to back up the files though... after that you can format it and do a clean install of windows xp.
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