Yes. Backup, in the event of error---which is mostly likely going to be human error at that (this is a fact, nothing personal). To be perfectly honest, XP (Pro or Home) is simply Win2k Home edition. It's the same core with a prettier interface and a few other bits. It's not a huge change.
There is software that can do partitioning for you, as you can only manipulate partitions/free space/other hard drives on the system other than the partition your OS is installed on. In otherwords, if your current HDD is simply formatted as one big drive, you can't use the tools under Windows to change the partition size if Windows is installed on that partition. You can use something like Partition Magic, but I personally wouldn't touch it with a 10ft pole. I don't know what the problem is, but there seems to be some problems in the way PM sets up the partitions that Windows doesn't seem to be able to read it.
It's not the most fun, but the best way to upgrade is to backup, then pop in the XP disk and reformat (and you can make a partition here too) and install. If you don't format, you're likely to run into problems due to the differences in files between the OSes, making it far less of a hassle to just do a clean install of Windows in the long run. Your choice, obviously, but speaking from experience, you're better off with a clean install.
So what if your burners broke. You've still got a couple of options.
1.)If you've got a network setup, copy the stuff you want to save over to another PC on the network. Copy it back over once you've installed Windows and done all the updates and driver installs.
2.)Physically remove the hard drive from your PC, hook it up to another system, copy out the files. Take the hard drive and hook it back up to the system, install Windows, do all the updating and driver installs. From here, take it back to the same PC you copied stuff over to and then hook it back up. (Note: make sure you do this with a comp that has Win2k or XP on it, especially if you format with NTFS--Win 9x--95,98,ME can't read NTFS formatting).
Alternative to 2.) if there's a burner on it, burn the files from there instead of having to hook up a hard drive once again.