Am I being conned?

I'm replacing everything except for my HD, according to a *i know everything about everything* friend, I don't need to buy another copy of XP, but according to the Sales guy, I do.

Who is telling the truth? Seems pretty silly to me to have all the OS files on my HD and not being able to use them.

I have no idea, so i am gonna spend money on a new copy. :D
Idiotproof that way.