I think its not wrong and nothing will go wrong if you could reinstall your window XP again. Thats what i did really. The whole turn exactly as it is 2 years ago since I first bought my Win XP cd.
Other people that I have ever heard of, they also suffers the same problem as u do.
I've never updated my XP, so far mine is okay. I'd rather download anything about new portions for XP at
http://www.download.com , to see if theres anything new there. Its your rights anyway if u want to update your window for particular purpose.
Hibernating needs at least 300 MB (im not sure, but something like that) free of space in your HDD in order to do it.