Right there is one of the biggest problems with Windows, XP and on. the "activation" mechanism. Just waiting until that's retired along with XP SP3 going away. Then you're going to hear some screaming...
The laptop I use for modelling on still has Windows 2000 on it for exactly that reason. I have all its bibs and bobs for a reinstall, and no "phoning home" to check and see if I am a dirty criminal even when I legitmately bought the OS (in this case, came with the laptop OEM).
You should be able to access your data and back it off using a Linux LiveCD like Mepis or TinyME (something that supports united file system), and just have an external drive plugged in when you boot it up. You should be able to back it all up at your leisure to your external then. And then its all safe if you have to reformat the drive and go a different OS.
That's one of the problems though running codes or cracks, eventually Microsoft catches up and in this case, your only option to buy a new OS would likely be Windows 7 with XP Mode (if the hardware supports it). Or XP off eBay, or in town (that may put you in exactly the same place).
First things first though, get a Linux LiveCD and back up your data. Then whatever happens to the OS, you at least won't lose anything that you were working on or that you downloaded.