When you do a clean install, on booting from the XP CD you can choose how to partition and reformat your drive from the CD right then. You don't need an alternative partition manager.
Is it better to have your OS and data on different partitions - Opinions vary. The one thing you must not do is create an OS partition that turns out to be too small in the future. I would recommend 50GB to be sure.
Your TI backup will only be of use for data when you re-install. Otherwise it will overwrite your new fresh installation with the old stuff.
One thing you cannot do is backup program files and then re-install from the backup - the reason being is that they insert many files into the OS installation - and you've just lost those in the re-install.
The only way to re-install programs is from the original installation disks or downloaded files.
So - you need a backup of all your data, and a note of all your settings (email setups, for ezample.
You need copies of all the programs you want to re-install.
And remember to do all the updates for Windows etc etc etc that date post you program installs.
This is just a quick skim over some of the issues and basics.