Cleartype wasn't originally developed for use in XP. It is developed by the typeface team at Microsoft ready for Vista, and the technology behind it is very interesting and very smart. However with the release of IE7 and XP SP3 they decided to reverse integrate it into XP.
You can also now download quite a useful cleartype tool for XP which allows proper setup of cleartype. It runs through a series of questions, making you pick type from a selection of examples to set the cleartype settings to your personal preferences. Once you have run through that utlity it does make a difference.