My MBP that dual boots into XP is out on loan, so I'll have to work from memory (as it were).
If you don't want the machine to hibernate, then I think the setting you want is in Control Panel under something like power management. One of the selections is hibernate. Uncheck or otherwise deselect, and there won't be any need for hiberfile.sys. I think that on the first reboot after you disable hibernation, that file will disappear.
If you do want your machine to hibernate, then you'll have to keep that file. What is it? Simple answer is that it's the place on the disk where XP stores everything that's in RAM so that it doesn't have to keep the RAM alive. Upon waking, XP reconstitutes everything based on what it finds in hiberfile.sys. I've never thought that XP hibernation was reliable, so I never use it. It's your choice.
Pagefile.sys is the swap file. All you need to know is that it's where portions of RAM can be moved when the RAM is needed for something else. When those portions are needed again, they can be moved back in. You need a pagefile.
Pagefile options only have to do with how it's created and maintained. You can find pagefile settings in Control Panel, System, and then I think the next tab is "advanced," although there may be an intermediate. Sorry, as I said, no XP machine to hand.
Almost certainly it's set to "system managed" (or some phrase like that). There's no compelling reason to change that, although I usually change the settings to custom, and make the minimum size 1.5 x RAM size, and the maximum equal to the minimum. What this does is force XP to make a contiguous pagefile, which makes it slightly faster. I use a utility called PerfectDisk, which makes sure the pagefile is contiguous and placed in the best spot on the disk.
But that's just me. If you like to tinker, tinker. If not, leave it alone. The only thing you really don't want to do is to disable the pagefile, and it's also not a good idea to set it to a size that's significantly smaller than your RAM size.
Whats going on there? 
