Clippy does appear in Office XP along with all of his other Office Assistant friends. Microsoft was gracious enough to include an option to enable Clippy. Some users (like myself) enjoy just letting Office run and watching the Office Assistant do fun stuff (like Links the Cat rolling over on its back).

Because Clippy got agitated over whether or not his job would be axed, he took over a small piece of Microsoft's website and showed off his talents as an XML web designer. One Microsoft executive discovered the site, and aimed to have Clippy exterminated. Unfortunately, the only thing he had at his disposal were office supplies. Don't ask me how Clippy managed to survive rubber bands, staple piercings, and thrown push pins.

In an agreement with the Office XP staff, Clippy was allowed to return to Office XP upon user demand, and the hijacked server space hosting Clippy's website was allowed to stay online. Today, Clippy is just idling in the background of Office XP, anxiously waiting for that one person that uses the computer and would be overjoyed with the phrase "It looks like you're writing a letter. Would you like help?"