I'm not familiar with Dell systems specifically but companies usually provide the means to re-store a CD to its 'as supplied' state using either CD's or a DVD or a 'restore' partition on the hard disk (which is usually 'hidden').
I don't advise you to try a manual re-installation first because you will need to identify and download the hardware device drivers.
Instead, read the documentation that came with the laptop. Somewhere it should mention how you carry out a 'factory restore' and tell you how to go about it, i.e. whether it's done from the hard disk (using a special keyboard entry at bootup) or from the optical drive (i.e. CD's or DVD).
The 'factory restore' will be either 'integrated' (meaning that the specific hardware device drivers will be included as part of the restore operation) or 'OS-only' (in which case there should also be a seperate 'Drivers and Utilities' CD included).
Alternatively, see the Dell link below for re-installing 'All Microsoft Windows XP Reinstall Guide [ All Desktops and Portables ]'.http://support.dell.com/support/topics/global.aspx/support/dsn/en/tree?c=us&cs=19&l=en&s=dhs&treeid=FFA33DA99941FEDFE030030ABD62041A&journalid=4C9C6FBF80FE11DA8062EFD8BF369C56
If you do decide to go on and carry out a manual re-installation then use the Dell site and the serial no. of the laptop to identify the specific model of Inspiron laptop then download all the hardware drivers (and burn them to CD, if possible).
You can re-install Windows XP without these device drivers but, if the laptop doesn't use hardware device drivers built-in to XP, it will be limited in operation (e.g. only 16 colours, no sound, no modem, no wireless, etc.) until the proper drivers are installed.
It goes without saying that, if you decide on a manual re-installation, then you will need an original Windows XP CD too. The manual/documentation that came with the laptop should provide you with the information about how you change the laptop to boot from CD/DVD, if it doesn't do so automatically.
Finally, if you run into any further problems then the 'Windows XP Pro' forum on this site will probably be a better forum for information than this 'hardware' one. (I only stumbled across your post accidentally as I tend to frequent the 'Windows XP Pro' forum.)
Hope all of this helps...