If you're going to do a repair install using the key that's on your
computer, you need to have the same version, whether it's oem, retail or
whatever.
If you want to buy a new copy of XP, the upgrade might work for a repair (I
haven't personally tried that scenario) using the repair key. But then if
you ever want to reinstall clean, you'd have to have a previous version of
the OS to use as a qualifier.
As far of that version of XP that you currently have, if the ex-employer
installed a volume license copy on your computer, it's legally still his,
not yours. If it was an oem or retail version, if he didn't hand over the
key and the media, he probably is figuring that he still owns that copy,
despite the fact that it's installed on your machine. Whether any of that
makes any difference to you or your ex-employer, I have no idea, but
ex-employers have been known to get weird about things like that. I guess it
depends on the terms of your separation whether they would make an issue of
it or not.
