Setting up to remote desktop to Windows XP

"Can anyone help me set up the system preferences etc so i can remote desktop the PC at work."

You need to install VNC server software on your PC. As to what that specifically entails, consult the documentation that accompanies the VNC software.

"I have downloaded MS Remote desktop client for OSX and tried to connect to to my PC at work but it says computer busy/contact admin etc"

MS RDC is completely different software and not related to Apple's Remote Desktop application.

IN preferences i have switched on Apple remote desktop, remote login and windows sharing.

That's for connecting to your Mac. Those settings will have no affect on your ability to connect to and take control of another computer.

As Templeton said, Microsoft's Remote Desktop Connection Client for Mac is a completely different application and uses different TCP ports from those used by Apple Remote Desktop. You'll have to try and find the port information on Microsoft's site or another web site, but from what I can find, MSRDC only uses UDP port 3389. So that has to be opened in the router at work, not port 5900.

MS Remote Desktop Connection for Mac can be used to connect to a XP Pro (NOT XP Home) machine, without the need for VNC Server. I have done it many times.

On your Mac at home, navigate to YourHardDrive/Applications/Utilities and launch Network Utility.
Click on the "Port Scan" tab and test port 5900 at the IP address you are trying to reach. Does it see an open port? Try going to the Ping tab and trying to ping the IP address with the port following it .... 192.168.0.1:5900 <- For example.
If you are able to get a response, then at least you know the port is open and is reaching your computer (Or at least some computer at work).
My guess is either the IT guy doesnt have the port open, or perhaps pointed to the wrong internal IP address, and not your computer.

You dont need to worry about the ports or services on the Mac. Those wont prevent your RDC (Remote Desktop Connection) connection to the work PC.

Are you getting an authentication box when attempting the connection? Possible your work computer is being backed up, and locking you out at that time? Have you tried various time periods? Have you checked Windows Firewall settings on the work PC? My guess is its some misconfiguration on the PC side of the connection somewhere.

RDC ( Microsoft Remote Desktop Connection ) and ARD ( Apple Remote Desktop ) are two different things, that is correct. ARD is made by Apple, and is used to control Macs using Remote Desktop or PC's using VNC
RDC is used by both PC's (PC version) and Mac's to connect to a PC running Terminal Services. XP Pro has 1 terminal server license with it, and therefore can be connected to using RDC