Win 2008 Server R2 - ADDING A WINXP cpu to a newly created GPO linked to an OU

Question,
I am new to 2008 R2 server so please bear with me. I am Running 2008 R2 Server - So I go into Administrative Tool and click on Group Policy Management Console and created a new GPO named “Win XP”. Once created I right-clicked on the GPO and clicked edit, from there I clicked on Windows Setting Account Policies and edited them as well the “Audit Polices\User Rights and Assignments and Security Options. Went back in GPMC to create an “OU” called WinXP OU”. I than went in AD User and computers to make sure that the “OU” was there and it was. I went back into GPMC and right-clicked on my newly created “OU” clicked ink to an existing GPO and selected “Win XP” GPO. I than went back in AD Users and Computes. Opened up computers and selected the computer that I wanted to move say “COMPUTER1” right-clicked on it and moved it over to my “WinXP OU”. Did a GPUPDATE /FORCE on the server and the computer that I moved over to my domain and nothing happened. The computer that I moved over is still pulling the default server policies and not the ones that I created with the new GPO\OU.
Can someone please tell me what I am doing wrong? Your assistance would be much appreciated, thank you.