Hello,
Since the data is also kept on the NUDF apart from the LUDF, you will have an additional copy of the backed up data in case of a hardware failure on the system with the LUDF.
You will need to install the remote agent in case you want to protect the system state data and other info on the Windows xp machine. For additional information on how the DLO works, you can refer to chapter L on page 1121 in the BE admin guide for 10d. Here is the link for download:
http://support.veritas.com/docs/279401