I imagine XP 64bit is similar to Vista 64bit, if it is, then the operating system will be 64bit but it will be able to run 32bit (x86) applications (if they install OK) and read their files or other 32bit files. You will have two Program Files folders, one for 64bit applications, and one for x86 applications. XP will install the programs into the appropriate folder. Similarly you will have two System folders, System32 and SysWOW64. All Windows Updates must be for the 64bit operating system however.
The above is purely based on my experience with Vista 64 bit, so it could be dead wrong as far as XP is concerned.
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