The Amiga *can* read PC floppies and the Catweasel is for reading Amiga floppies on a PC anyways.
To read a PC floppy on the Amiga you have to run PC0 from Storage/DosDrivers. The floppy has to be a DD floppy unless you have a HD floppy drive. As WinXP cannot format DD floppies, you have to format it on the Amiga first. (Be sure to format the disk in drive PC0: and not in DF0:)
Bye,
Thomas