I like to unplug hard drives I don't want to format, just in case of a fluke and something gets lost/formatted etc
I see no flaws in your plan. Just be sure to copy everything across, as I always tend to forget something and then regret it later
I think I'm going to re-install Windows this week on both of the machines in my house. Thanks to AutoPatcherXP, it should be a smooth and fast process to get upto speed