If the machine's specifications support XP, then I'd say yes. XP (being really NT 5.1) integrates better than 98 with NT4 server. And its much more stable than 98.
You'll need at least 128MB ram (preferably more) - and I'd hesitate to put XP on anything slower than 350mhz processor.
Also, there's an upgrade advisor you can run which should tell you about any potential hardware problems.
PS. XP also needs more disk space than 98 (typically, probably around 1GB more) - though you can turn off some of its space eating option (eg, system restore & hibernation) if you wish.
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