Yes, Parallels will run alongside Boot Camp.
according to MS's EULA you are allowed to install XP on only one machine. If it's an OEM version only the machine which it was purchased with. MS Office is allowed to be installed on one desktop and one laptop.
as far as Office coming with 3 keys, that is OS X ver/student & teachers. For win only one key.
I also wouldn't worry about running WXP on both sides, because even tho it is installed on 2 partitions it is only installed on one machine. If it won't authenticate using internet, use the 800# and authenticate over the phone.
Serpent
@AvA2345
did you try re-D/L'g and re-burning a new drivers disk?