sometimes it works depending on the particular model, and bios of the laptop
Dell has proprietary hardware, they try to force you to buy hard drives, memory sticks, etc. from Dell, and intentionally create hardware that will only work in dell computers, and the other way around-many times you cannot install off the shelf hardware in a dell computer, unless you buy it from dell. I think you understand now.
Load XP into the drive plugged into a desktop? You can try it. I would try that first.
I would open the laptop, plug a CD drive into the laptop IDE cables, and try to format and load windows from there. I don't know if that will work, but it seems like a fair bet.
Another way is to buy a velociraptor 80 GB drive from e bay. This is a Dell hard drive, which will fit in a laptop, it's 2-1/2 inch. It's about $70. But again, I don't know if the laptop will accept it due to the machine bios. This drive will work in an ordinary desktop just fine. I used one recently, and boy, it's really fast.
Another way is to contact dell, and pay the ransom for a CD drive that is approved to plug into that particular laptop. You can bet that they will charge plenty.