first you won't lose warranty - that's a nonsense.
Just insert the installation media into CD/DVD and reboot (you have to have "boot from CD-ROM enables" - see BIOS help of your computer).
And now the options:
1) easy but shady:
try to install new version (first dialog when you boot from installation CD - you chose to install new OS and you can install it to a new folder).
Then you will have both Windows XP and Windows Vista installed on your computer (but better don't run the Vista).
2) hard and better:
create new disk and install it on this disk
3) easy and brutal:
format c:
install XP
4)the hardest and the best:
read
THIS ... burn
THIS... then boot to Bart PE
delete ProgramFiles folder
delete Widows folder
insert WinXP installation CD, restart, install.
Choose what you like. If you have backed-up your data, I recommend format c:.