If DX10 can be installed, it's a grey hack. I heard that rumor too, but don't give it much credence. Microsoft forces Vista upgrades by making DX10 only available with Vista. Some people opted out as DX9 works fine as is.
For example, I wanted DX10 and went Vista. My wife didn't like it on a dual boot and had me just set up XP as her sole OS. We both play the same games and she does graphics besides.
If you are running XP, then the simple answer is 'No, you can't install DX10'.
The DX10 hack out there is from the Alky project - a couple developers decided to make a bridge that maps DX10 code to DX9. There's a couple issues with this: The first is that this is a software translation layer and inherently slows performance. Kind of an odd approach when the entire idea of Direct X is that the calls are made directly to the hardware itself so that this exact kind of translation can be eliminated in order to maximize performance.
The second main issue is that there are API calls in DX10 for which there are no equivalent in DX9. My limited understanding of this is that many of these new calls represent functionality that requires multiple calls and multiple commands in DX9. Mapping this can NOT be easy to do, nor efficient.
But at the end of the day, the point is moot - The Alky project has been abandoned, and the code "Donated to the Community". Depending on your own ideas on the subject that could mean a bunch of things.. From "Just wait!! Someone is going to pick this up and really stick it to MSFT" all the way to the opposite side of the spectrum with a cynical "Failed and Bailed".
For the time being, though - There's no real need to upgrade, as there are very few actual 'DX10' games, and those that do say they're DX10 are more normally DX9 with some added commands that exist in the DX9 version that Vista uses. Not really DX10, since that wouldn't run on XP at all.