You have not answered one question that is crucial to your being able to reinstall XP - do you have access to a previous version of Windows CD? It must either be Windows 95/98/ME or Windows 2000/NT4.
If you do, set your BIOS to boot off the CD, and insert your Original XP Upgrade disc and then boot the machine. This is best done by turning on the machine and entering the Setup routine. I don't know offhand what the key stroke would be on a Dell, but on HP its to hit F10 when the text at the bottom of the screen says "<F10=Setup>", on most aftermarket motherboards its "<DEL>: BIOS Setup". Then in the BIOS setup change the boot sequence and before exiting, insert the CD in the drive. On exit, the machine will boot.
1. If you wish to try the repair option, read this
document.
2. If you wish to try more here is another
restore document.
3. If you wish to reformat the drive you can take the option to do a new installation, after that you will be given an option of installing in another folder (not recommended) or reformatting the drive which is the best option. At some point it will ask for the COA, which must be the COA in the upgrade package, since you have another OS on the sticker on the bottom of the machine. When the upgrade disc does not find a previous edition of Windows during the install it will ask you to insert the previous windows disc for verification of upgrade authorization. Only a previous Windows version CD will work. A Vista DVD will not work, nor will another XP disc, unless you are going from XP Home to XP Professional.
After reading the previous version CD file, it will ask you to remove the CD, reinsert the XP CD and it will continue.
A new HD will have the exact same process as #3, except you may not have to reformat, although it is recommended. It does offer the ability to have some backup of the files that you many think are backed up, but might not be.
Regardless, a reinstall will require a previous version of Windows CD if you are reinstalling XP from an upgrade disc.