1-Remote Desktop is the first choice, but
2-Remote Desktop application I downloaded from Microsoft but it only allows me to connect FROM my w2k box TO a WinXP box, not the other way around 
RealVNC and TightVNC are alternatives also google teamviewer
Also saw this download remote desktop from microsoft and install it on the win2k machine you can remote the xp after that. Other way round isnt possible with basic installation
3- login vs interaction?? Login is not related to Remote Desktop per se, it's an OS feature. I think you're really asking
do I need separate programs on the target system to be controlled vs. the system I use to perform the controlling operations.
This depends upon the specific program used, in which case the TARGET system will need the SERVER program and your remote controlling system will need the CLIENT program