I would say boot from the Vista DVD, then see if you have empty space on your HD with which you can create a new partition. If you install Vista in said partition, that is new, all your old data/files will still be there.
However, if you have your whole HD partitioned into one large logical drive, you will not have any free space with which to create a partition, and it is required with XP Home I know that you must install XP in a new partition, there is no way around it, you Must create a partition to install XP, and I would assume Vista would be no different in said matter.
A simple way to check: In XP Home (Make sure you're on an administrator account) goto Start -> Control Panel -> Administrative Tools (If the control panel is in category view mode, switch it to Classic view mode.) -> Computer Management -> Disk Management. Your HD should be there, with what it is, if anywhere it says "Free Space" or something like "Unpartitioned Space", then you're good if you have, I would say, 10-20 gigs for Vista. If you don't have said sayings anywhere, you need to get an external HDD and put all your data you wish to keep on the external HDD. External USB drives are pretty cheap now.
And I would do some research on how much space Vista takes up, I know I would put 5-10 gigs for WinXP if I was making a separate partition, but I have no idea about Vista.
All this from an A+ Certified Techie.
(CompTIA A+ Certification, google it if you dunno what 'tis. Depot Technician certified.)