Treat this as a new build computer - that's really what it is. If you want to use the old HDD (the one with the XP), then perform an NTFS format on this HDD.
Now install all your new stuff, Follow this guide: http://www.tomshardware.com/forum/274745-31-step-step-guide-building
You will do fine!
I will need to install new Windows 7 on my old hard drive that is why not sure if I will be able to do it with all new hardware.
So is it better to perform an NTFS format on this old hard drive before I boot new windows 7 CD?????
Or it will make no difference?