Windows XP installation of Legal Copy

I am running Windows XP Pro. The copy of my operating system does not have a valid product key so there are programs that I cannot validate due to using an illegal copy of Windows XP. My brother lends me a brand new legal copy of it. What I want to know now is if it’s possible to install this legal copy of Windows XP Pro with my current copy without having to lose all my important files and settings. Please help.
