kinda if you got SP2 on your XP it pick it up as a like SCSI or USB hard drive make sure your Bios support storage USB 2.0 support (enable) if you got one or make sure it on USB 1.1/2.0 (enable). if you need to format the drive then go to Computer Management from Control Panel from Administrative Tools and click on Disk Management to format the drive.then it ready to move files on it or whatever you do with it after it format i would restart computer after this to make sure.
You don't need to restart after setting up an external USB drive, as it will work just fine with any version of XP, pre-SP2 or not. Most drives I've tried in Windows 2000 have worked without drivers. If the drive is preformatted (typical if you bought it as an external), it should just work. If it isn't pre-formatted, going to the Disk Management console will allow you to do so.