I'm about to get my aging Thinkpad a new harddrive. I want this thing to be way zippier than it is now -- I'm just going to use it for Web / email when I travel -- and I want to reduce the footprint of XP if possible to speed up performance. Can I use nLite to reduce the size of an existing XP Pro installation, working with nLite on the same machine? (in other words, just using nLite to modify the existing installation). Or do I need to do an entirely new installation?

I have searched through the forum prior to asking this question, and it's not clear.

check out the stuff in my signature, it is designed to delete an already-existing installation

nLite cannot be used for existing installations.

If you want to slim down an existing install you can use XPlite (shareware) or follow Bold Fortune's guides.