having two (or more) operating systems is no big deal at all. they don't interfere with each other at all (no matter what operating systems you have). the computer only boots up one at a time. the multiple os's don't even know how to use the same installed drivers or programs.
as for removing win2k, a simple way of doing it is to just goto My Computer and delete the folder win2k is in. not the best way, but it wont have any negative effects on the pc running, there will be some win2k system files left floating around (mainly in the root dir), but there quite small. a hard drive reformat would be better, but you'd loose everything on the hard drive and have to take the time reinstalling everything.
if games are still freezing despite the winxp instillation then chances are it wasn't an OS incompatibility.
keep in mind that for the winxp instillation, you will need to reupgrade all the drivers. and reinstall directx etc.