If the Windows XP is using encryption and you force it to delete the password and allow you access to the operating system, then XP will allow access to the operating system but it will deny access to all of the users individual files which will stay encrypted and will probably not be easily recovered. However if you use a different type of program which cracks the password rather than break or delete the password then all encrypted data can be recovered. The main drawback to cracking the password via a program is that it can sometimes take hours before a match is found.
This is perhaps the best free password cracker software for windows XP and Vista, but as I said it can take time. Sometimes hours.