No you do not have to format the drive to add it.
Saying that it may present you with a problem where it
moves the boot order around depending on the motherboard.
The original harddrive is the one you want to boot to
the other harddrive that you add can be used as a data (storage) drive
If it tries to boot to that added in harddrive it likely will crash completely.
XP was never too good when you changed out the hardware unless you
made special provisions to have the windows system accept the new hardware.
You cannot run the programs on the added in hard drive. That requires it to be the primary hard drive.
Which as I said likely will cause it to crash totally.
Lastly but not leastly i sure hope this XP machine "IS NOT ON THE INTERNET".
XP is wide open for "owning" by hackers, and would be especially
tempting since its for bookeeping.