I wouldn't trust upgrade advisor at all. I had to use this program once (I worked a couple of weeks for a company that migrated from 98 to 2k) and it didn't do me any good.
Unless you are using very specific software, chances are quite slim XP won't work with the older software...
If you want to make sure, you can:
1. install XP on an other partition on your system, to see if XP works out for you (if so, remove both OS' and reinstall XP)
2. make a image (with Ghost or so) from your ME installation, format the partition with ME on it, install XP and see what happens... if it turns out to be a no-go, just place back the image you made and off you go