With the windows xp, i rencently just did that same thing with my computers. But i've had it do two different ways. A) If will let you activate it nothing is needed, just update as you normally would. B) It will not let you activate it becasue the key was in use. And all you have to do is call windows and let them know your situation, assuming everything is legit, the key and all. Just tell them your taking the windows key off a broken computer you are no longer using and putting it on your new one.
With the computer build however, if your not planning to do any gaming i would sink more money into ram than anything else, unless you need alot of storage. I would expect to pay something anywhere from $150-250 for the ram and $150-200 for the mobo. Here are some good options.
mobo - http://www.newegg.com/Product/Produc...82E16813131030
ram - http://www.newegg.com/Product/Produc...82E16820231073