I understand that N360 doesn't back up programs. I backed up all the files I wanted from the XP machine to the external hard drive. I have 3 backup sets in the drive: the DefaultSet, another set I created a while ago when I had a problem with the external drive (a WD MyBook), and a new set I created specifically for this transfer, to which I copied everything I wanted to transfer.
I can use file explorer and I see (besides the "OS C": drive and the DVD drive) a "Norton Back Up" which shows odd and unrelated content, and "My Book" in which I can see 3 encrypted large files, which I assume are the backup sets in the external drive. But when I use N360 and click restore it uses the "DefaultSet on OS C:" and no other source is listed to switch to. And when I choose to Manage Backup Sets it only gives me DefaultSet as a name; no other sets are listed, although I can choose the external drive as a backup location... In other words I can (with the 8.1 PC) backup to the external drive if I wanted, but I can't back up from the external drive to transfer the XP PC's files that are in the external drive now.