Depending on what you were provided with when you purchased the laptop, you have two options (maybe). If you were provided a simple rescue/restore disc, you can follow the instructions with the disc. If you were provided with an OEM version of Windows XP, you can boot from the OEM disc and format/reinstall the OS.
If you choose to format and reinstall the OS, put the CD in the drive and shut down the computer. When you turn it on, look for whatever key puts you into the boot menu. Once you hit the key, it should bring up a list of options for you to boot from. Choose the option to boot from CD and then you should get a screen that says press any key, so press any key. From there, just follow the instructions on the screen. If you are wanting to erase everything and start over, when you get to the partition options, just select format/delete and then create a new partition (or multiples, depending on how you want to set it up) and install the OS on it.
IMPORTANT: If you do not have a second computer with internet access or a drivers CD from Dell, download your drivers BEFORE making any changes to your system. Of course, back up anything you don't want to loose if you are wiping the hard drive.