Will reinstalling Windows XP on an existing partition wipe out my "My Documents" folder?

You want to do a repair installation. The first option you get for repair will bring you to a console, you don't want that. The second time you are able to press R for repair is when you are choosing whether or not to format the drive, etc. Press R there and it will replace system files but leave personal data and user accounts right where they are.

"This method may be used for replicating a single user account or multiple user accounts on a new installation.

Boot off the Windows XP disk
Enter the setup and select 'Esc' to start a new install
Select your Windows partition and press 'c'
Upon partition preference prompt, select 'Leave current file system intact'
The install will tell you a Windows directory already exists, press '1' to delete it and create a new one
Continue with the setup, when it asks for your name, type in any temporary (different) name

When Windows XP boots up, you will be logged on as the new user and your old XP account(s) will be present in the 'Documents and Settings' directory
From this point, it's just as simple as creating a temporary directory elsewhere on your drive and moving your old user account(s) to there
Next, you have to create (a) new user account(s) for your desired new permanent setup (I have not tried to change the usernames, I always used the same ones)
Log on and off once for each new user created, then log back onto your temporary user
Start 'Command Prompt' and type 'xcopy c:\yourtemporarydirectory*.* ""c:\documents and settings"" /s /h /r /c'
When asked whether or not to overwrite a file, press 'a'

You're done! Just log onto your user account(s) and make sure everything is back to the way you had it before the reinstall. After verifying, you can go ahead and delete the temporary user account you made. It's usually suggested you keep the backed up files for a week or two, or until you think everything is working correctly."