As far as I'm aware there isn't a problem running Office 2000 with Windows XP.
The spreadsheet and word processor applications in Microsoft Works are very basic in comparison with Excel and Word. They can open simple files created in Excel/Word as long as the documents don't include any features that Works doesn't support. For example, the Works spreadsheet is only a single sheet applcation, it doesn't support multiple sheets in a Workbook as Excel does.
Microsoft Works "SUITE" actually includes MS Word, but the basic Works only has its own word processor. Neither version includes Excel.