Hi;

Not really a Windows Update question, but let's give it a shot.  In my
opinion, Yes, it is almost always best to wipe the drive and install a
new operating system cleanly.

As to how to wipe the drive, there are several ways.  This is called
disk formatting.  You can boot with a 3.5" floppy diskette that has a
version of MS-DOS on it and has the Format.exe command there.  The most
common method, I'd guess, is that when you boot from your Windows XP CD,
there will be an option to format the drive (partition) where you intend
to install XP.

As for XP recognizing your internal modem, not sure on that one.  This
may be an older hardware system, and XP doesn't play well with older
hardware.  I'd recommend you go to the website for the brand name of
that modem (as it is displayed in the Win98 Device Manager list) and
look for XP drivers for that modem on that website.   BTW, this is
generally termed the "OEM" (Original Equipment Manufacturer) so you may
see that term when folks suggest where you can find drivers.

Last, the reasons you have 3 XP's to boot from is that you have
installed XP on 3 different partitions, or in 3 different folders on the
same drive/partition.   If you have installed to more than one partition
(it will have a different drive letter) then you will need to format
those partitions as well.   If you have installed into different folders
on the same drive (never, ever a good idea) then just formatting the C:
drive will get rid of the other instances of XP install attempts.

HTH.