That is exactly what one does to recreate his library in XP.
Just transfer the entire iTunes folder to your "My Music" folder under XP, making sure the index files are also copied. I just copy the entire "iTunes" folder, which causes the necessary index files to also be transferred.
If you've had iTunes set to NOT manage your library, you might as well strike this method of transferring your library out of the list of possibilities.
In XP, the iTunes folder lives in "C:\Documents and Settings\Your Profile\My Documents\My Music\"
In Vista it lives in "C:\Users\Your Profile\Music".
Donald L McDaniel