Firstly you need to know that your pc is upto running XP posting the specs here would help with that.
You have two options if you do decide to go ahead one is you could upgrade your existing installation this is achieved just by popping in the xp disk in windows and then installing, if I remember correctly I think tha xp disk has a compatabilty test on it. Or you could wipe the hard drive clean and do a fresh installation.
Could I just use my wifes xp disk? No you couldn't if your wifes computer is using the XP license key that came with that copy. You wouldn't be able to activate the copy you installed onto your PC, you would need to get a copy of XP for yourself. If you have the exsiting windows98 disk then you could purchase an upgrade copy, or you could buy an OEM copy of xp. These would both come with there own license key which would allow you to install and activate.