Dell XPS can refer to laptops, desktops, etc. Can you point to the specs on the system you are considering and what choices you need to make?
I assume the i7 you are getting has a four digit number (like i7-2600) not a three digit number (like i7-920). The four digit numbers are the new generation, and they are measurably faster at lower power -- you will save money on the electric bill while working faster.
For memory, default is 8GB. If any of the software you are using is known to need a lot of memory you can go to 16GB on most high end servers, but that requires relatively more expensive 4GB dimms.
For hard drive the default drive in a high end server is probably fine. I use an SSD in my laptop, but choose not to use one in my server. IF you get an SSD then you should see somewhat faster application startup and faster boot times, once apps are started you usually do not see any difference (no one pages with 8GB of memory).
For video card, if you don't game, you have your choice of integrated video and $50 video cards that will support 2 high resolution monitors with ease while also accelerating DVD and blue ray. Examples: nvidia gt430, amd 6450. Both good and cheap. If you plan to game, post -- you need a radically different graphics card. The I7-2x00 family of processors has integrated dual monitor display capability. You'd need to check and see if the version of Dell XPS you are considering supports that.
Aside: you should get a big chunk of change back from your "around £1,500 - £2,000."
Intel® Core™ i7-2600 Processor (3.4GHz, 8MB)
8GB Dual Channel DDR3 1333MHz [4x2048] Memory
1TB Serial ATA (7,200 rpm)
DVD +/- RW Drive (read/write CD & DVD) with Roxio and DVD Burn software
NVIDIA® GeForce GT 530 1GB DDR3 Graphics Card
Display Not Included
Sound : Integrated 7.1 with THX® TruStudio
English Genuine Windows® 7 Home Premium (64 BIT)
You Save £329.00
incl. VAT, shipping
What Tsnor posted will be suitable for your needs for some time to come, but to answer your questions anyway.
i3 "entry" level processors, capped at only two cores (thing of the processor as having two CPUs combined into one). Honestly, for spreadsheets and internet surfing a i3 is more than capable of performing insanely well. Considering I do photoshop and excel spreadsheets, as well as video editing on my dual core processor from 2008, an i3 would be more than suitable for those tasks.
i5 are processors with 4 cores, more cache (memory on the CPU), and are capable of perfoming better in multi-threaded applications (meaning software that can take advantage of processors with multiple cores). These are becoming the new standard in computers, and a i5-2500 is probably more than enough for your needs.
i7 are processors with 4 cores and hyperthreading (which basically makes the processor a 'virtual' 8 core processor) and more cache than the i5. Not generally worth the extra money unless you have applications that can use more than 4 threads (cores). However, since this is a productivity computer, the i7s are more preferred because they get tasks done faster, saving money in the long run. Besides, it'll 'future-proof' your computer (depending on what you consider future-proof as being).
RAM is temporary memory. Basically, the more the better. For your tasks, 8 GB should be more than enough, but with more programs consuming more RAM, 12 GB is probably the safer route to go. Anything you do on a computer generally uses RAM. If you don't have enough RAM, then your computer will get slower as the RAM gets filled up. I'm not going to explain what RAM does, but just go with me here: 8 GB will do the job, but to make sure you'll have enough for years to come, 12 GB is the next step (or 16 GB if you really want to be sure).
The difference in GPUs. Just speed and power. The higher the model number, the more powerful it will be (Aside from the 530 vs the 450, where as the 450 should be more powerful). The more RAM the unit has, the better it performs at larger resolutions in games. If you don't game, then you don't need a powerful GPU. A powerful GPU can render very quickly, which is why we have the graphics we have in today's games. No gaming = no need to render, so you just need a GPU capable of pushing the data from the desktop to your monitors. As Tsnor said, the 530 should be fine, unless you plan on playing games, then you'll need the GTX 560...
RAID = faster, because the data is being spread across two different hard drives. This allows the data to write faster, as it doesn't have the wait on a single hard to do all the writing (think of writing a 1 page essay. Thats a single HDD. Now think of two people writing the same paper, one person writes the first half while the second person writes the second half. Thats RAID 0). However, if one disk fails, then you'll lose all your information. For your needs, you'll be fine with a single 1 TB drive.
PS: All of those hard drives are serial ATA. serial ATA = SATA. SATA = the connection of the hard drive to the motherboard.