That's right. Basically, XP has all core components from Win2k, including the graphic portion (GDI). However, XP will come in 2 flavours: a Professional Edition is supposed to be an upgrade for Win2k Pro, and a Home Edition which is considered as an upgrade for WinMe. The differences between the 2 editions, i guess, is mainly the security portion of the OS. The Win9x path is dead because, as far as I know, XP does not have anything from Win9x or Me.
For old games and all "legacy" software and games, try to run in XP Compatible Mode (there is an icon with that name on XP desk top available).