Project 95 is so ancient and there have been so many improvements since
then I'd strongly suggest you move to a more recent release as long as
you're upgrading everything else. If the cost of 2003 is an issue, you
can find P98, P2000, or P2002 on eBay etc at quite reasonable prices.
Project 95 is essentially 16bit Project 4.1 "thunked" to pseudo-32bit
for Win95.
Having Office XP installed on your machine wouldn't make any difference
but the OS installed might be an issue and you don't say what you have.
I doubt there would be any issue with WinNT, Win2000, Win98, or (G*d
forbid!) WinME but I just don't know about WinXP. Not likely to hurt
anything to install it and see what happens though - if you have WinXP
and are really worried just save a System Restore point before doing the
install and if worse comes to worse you can roll back to the immediate
pre-install configuration.