Windows XP is not available retail any more, so this is a pretty good deal for collectors of OSs. I do, however, have to note that Windows XP is no longer supported by Microsoft. Auto Update still works, though.
No, it is a full edition, read your manual it gives you upgrade, or full install provisions.....even on a completely formatted drive. Start your PC with the CD in the drive and be sure your BIOS is set to boot on CD drive, when press any key to boot from CD shows, do just that and you are in Full install mode......