Is it possible to completely remove IE from Windows XP?
No
It is technically possible to delete all the IE components and still have the basic functionality an operating system provides, but lots and lots of things you take for granted would break. It’s a core component that is now relied on by a great many other pieces, because using HTML to build a user interface is really convenient. Help and Support Center, Windows Update, the “User Accounts” control panel, and lots of fluff like “Take a tour of Windows XP” would not work, to name a few examples. Lots of 3rd party apps rely on the IE components, too, and not just in obvious ways.
Do you know how to do it?
You also need explorer in order to use the windows update webpage, which I like to do from time to time. With expansion pack 2 you have access to the security center though which will automatically download updates for you.
No. It would be a matter of doing a lot of trial-and-error scouring of the registry to find all the pieces and delete them, and you would have a difficult time knowing if you broke something critical without going through a fairly rigorous test plan. Unless you have a really perverse idea of fun, I don’t recommend it.
On the other hand, it’s completely possible, and not hard, to set Firefox (or whatever your favorite browser is) as the default for HTML files, so you never really have to use IExplorer. And it’s free! (Firefox, anyway)
It’s a good idea anyway to keep IExplorer around anyway for those two or three web pages that haven’t gotten around to complying with HTML standards and only work with IE.
That may not be what you’re really asking about of course.
The real reason we are stuck with IE as we are is more due to the US government suing Microsoft to have them remove IE from the OS and sell it as a separate piece. This was back when Netscape Navigator was as common or even more common than IE and IE was eating its market share because Microsoft was giving it away. Microsoft then told the government that it was wrong to ask this because IE really wasn’t a different product they were giving away to kill a competitor but actually an integral part of the Operating System. Of course, there is no real reason why it had to be this way but it was Microsoft’s way out of that pickle. By making it part-and-parcel of the OS the government could no longer justifiably tell Microsoft to unbundle it. As a result IE really is pretty well embedded into the OS and getting rid of it can cause all sorts of unforseen headaches.
As mentioned, just use Firefox or some other browser and ignore IE and you should be fine 99% of the time.
Sigh How I wish it was only “two or three.” Every time I hit one of these sites that’s completely broken in Firefox and/or Netscape, I take a look at the source. The majority of them seem to be made using Microsoft FrontPage.
The latest “subtle” incompatibility was a table with a CSS-formatted cell. The data in the cell is very long (it’s the main body of the page, and can stretch for 100+ lines). The style sheet specified a height of about 300 pixels for the cell. Firefox and Netscape both held the cell to that height, cutting off virtually all of the data. Internet Explorer expanded to show it all. Net result, FrontPage once again built a page that only works with IE.
Thanks for all the replies. 
One more reply Dog80, surfing the web this morning I came across IEradicator, which is a tool you might take a look at as it is supposed to remove IE for you. I found it on: http://www.tinyapps.org/internet.html
I used IERad in Win98, then reinstalled IE as a separate entity; it makes a huge improvement to the performance, mostly I think because the desktop/web integration in Win98 was poorly implemented.
I wasn’t aware that IErad was available for XP though and I’d be rather wary of using it, because IE is so much closely linked with the OS.