If you bought all the components for your pc, and you bought a retail version of XP at that time, you would have got a sticker with the product key on it, to stick on the case top or side, so that it's ready to find later on, if needed.
You can use XP for 30 days but then it must be activated.
(You can install it again for another 30 days.)
The product key is then linked to several of the main parts of your pc, (motherboard, hard drive, CPU etc ) and that number is unique to your pc.
The product key is 5 groups of 5 letters and/or numbers.
If you buy Microsoft Office, it has it's own product key.
Going into 2012 you could install a Linux distro for free, use it till Windows 8 comes out, could be June it seems.
If you use a pc mostly on the net, then Linux would give you Firefox or Chrome, and others, and Libre office is compatible with MS Office. And it's all free.
It's what I am using to post this. (Linux Ubuntu 11.10)