I suggest you use W2K unless you absolutely have to have some feature that is unique to XP. W2K has had more time to be shaken out and is more stable.
Also, I believe XP still has some backward compatibility features to support old hardware and old software which might also make it less stable than W2K (which has been rock solid so far for me).
Re: multiple installations - yeah, I believe XP some MS anti-piracy feature that allows you to only install it on one machine so you don't "buy once, install everywhere"