I've installed and supported Office 97 and Office XP together for about 6 months on Win2K Terminal Services. With few glitches like older Word 97 docs not opening in Word 2002 [reason for coexistance]...seems to work OK. However, I'm convinced that we should have stuck with Office 2000. Office XP is still bleeding edge.
Install instructions...go to MS web and search for Q290576
Upon revisiting this issue, I noticed this article actually devoted a section to my question.