As long as your XP CD matches the XP Key (ie: XP Home OEM), you can use them together.
It's not quite as simple as that for XP Home. There is XP Home OEM (the kind you'd get from New Egg) and then there's XP Home OEM huge-pc-manufacturer-version (check it out even the product keys on said computers have the manufacturer's name - HP, Sony, etc). Your HP/Sony/Toshiba Home product key won't work with regular Home OEM; this is also true for XP MCE 2005 but not for XP Pro. My work laptop has XP Pro and I was able to use a generic OEM disc to reinstall Windows using the product key on the laptop.
This doesn't work with Home or MCE. My guess is that the huge OEMs get a special version of Home and MCE because they ship so many of them; while they just use or modify regular versions of Pro OEM. The best course of action would be to try to find someone who has an HP/Sony/Toshiba OEM OS install disc (not a restore disc) and make a copy of it. A buddy of mine bought an HP laptop and it came with an MCE 2005 install disc in addition to the restore disc; I quickly "borrowed" it from him and I have been able to use it to reinstall MCE 2005 on HPs and Sonys (haven't tried on anything else) using the product key on the computer.