Windows XP last version of DirectX is 9.0c revision LE
XP does not recognize DirectX 10
For DitectX 10 programs and DirectX 9.0c programs, Vista runs DirectX in a dual mode. Vista current DirectX version is DirectX 10.1 (although DXDIAG only shows 10.00.xxxxxxx)
However Vista also has the latest version of DirectX 9.0c revision LE on board as well.
Vista will try to run programs under DirectX 10 first and if the program doesn't work, then the OS will drop to Basic Mode and run the program under DirectX 9.0c.
Now there is a rip of DirectX 10 that will enable you to operate a DirectX 10 program on XP, however the Video and Audio will still be run under DirectX 9.0c
People have edited the registry to incorporate DirectX 10 in place of DirectX 9 and ended up having to reinstall the OS from scratch.
DirectX 10 shaders will not work on XP and neither will the DirectX 10 graphical enhancements.
the latest version of the DirectX installer will install the latert version of DirectX that your computer can possibly handle.
the latest DirectX installers contain only DirectX 9.0c and DirectX 10.. on XP systems, only the DirectX 9.0c revision LE will be installed, on Vista machines DirectX 10.1 and 9.0c revision LE will both be installed.
So what do you need on your system for DirectX 10?
Windows Vista or higher.
Make sure any software you buy is XP compatible until you you upgrade to Vista. A DirectX 10 p[rogram that does not have a DirectX 9.0c downgrade will hot work on XP.
However DirectX 9.0c revision LE will continue to recieve updates until 2010.
Hope that this helps