Yes, it is certainly possible given your computer's specs, however, you would need some other OS other than DOS to install winXP from.
Nope not necessary, I had booted on a DOS floppy to remove the previous partitions. So there were no partitions or OSes on my machine.
I then booted from the XP upgrade CD, and the install ran all the way through, without *ever* asking me for anything to do with a previous version of windows.
So I didn't need any other OS to do the install. If DOS had been on the HDD I could have still done the install - deciding to wipe over it or go elsewhere on the HDD. As you said, you can't run the XP install from DOS, but you *can* boot straight from the CD and get round that.
The original question was about a new machine - which will of course be quite happy to boot on the CD, and install will run fine.
As fc34 says, the specs are fine for XP.