Have a computer that has windows xp home edition on it want to install windows 2000 on it. Haveing problems doing this.

Try installing it to a different directory.

you cannot down grade.The only way to be able to do that is compelety wipe your hard drive

how do i format the harddrive right click the c drive then hit format will this work while i am in windows.

   Instead of formatting, you should be able to just delete the registry files.
   If Windows is running, it will not allow you to format the drive that has itself on it.
   To format or delete the registry files, you have to start your computer in a different operating system other than the Windows that you are going to delete.  BartPE or our XP Recovery CD Maker (http://www.xp-recovery-cd.com) may be able to do that.
   Once you are in a different operating system, to format c, go to a command prompt and type, "format c:".  To delete the registry files, delete the C:\Windows\system32\config directory.  Then put in the Windows installation CD, restart your computer, and follow the prompts.
   I think that if you install Windows to a different directory than the previous one was in, that it will ignore the previous registry files and so it would be possible to install an older version without wiping the drive clean.  Some people just say to wipe the drive clean because that is an easy thing to say but it is not always neccessary.

How to dual boot Windows 2000 and XP.
http://support.microsoft.com/kb/306559