If you are using the Nvidia 64raid driver then try updating it to clear the problem.

With what your plans are: I wouldn't bother doing a complete system back up.

Just back up the "E" drive and burn it to disc
Just back up the "C" drive and burn it to disc.
then using the installation CD do either:
kill the XP partition, reformat it as a storage partition and the reinstall vista on the "C" partition
or
kill the xp partition and the "C" partition and create a single new "C" partition and install vista to that.