Wezza,
A clean installation destroys all programs, data, and settings on the computer and replaces them with a fresh installation of the Operating System.
Once that is complete, you must then insert the CD(s) for the program(s) you wish to install and follow the installation prompts to complete Setup for each program.
If you do not have genuine licenses for these programs (in the form of genuine MS CDs and a Certificate of Authenticity), it is likely that these too were counterfeit copies as was your previous installation of XP.
In the USA (not sure where you live), the most economical way to purchase Word and Excel would be as part of MS Office 2003 for Students and Teachers, which allows installation on up to three (3) computers at the same time.