Upgrading v3 to v5

Hi,
I would like to upgrade my version of Parallels v3 to v5. However I don't want to have to re-install my windows XP as its unsupported and I don't believe I could get all of the updates (SP3). Further to that I don't want to have to re-install all the programs I run in my windows environment.
Can someone tell me if the upgrade to v5 requires a r-install of windows? Or can I upgrade and leave all my folders and files on the windows side untouched and fully functioning after the upgrade?

I run a Unibody 15' MacBook Pro 2.53 GHz and 4 GB of ram. My windows is XP SP2.

Thanks