To determine if your computer has a functional Dell PC Restore partition, watch the computer boot up. After the Dell screen disappears following a start-up, a blue bar having the Dell name in it will appear at the top of the display. The blue bar, or stripe, will show for about two seconds, after which you should see a statement about loading the descriptor for PBR2. You must press CTRL and F11 during the appearance of the blue stripe, releasing both at the same time before the appearance of the statement about loading the descriptor for PBR2. If you are successful, you will get a display giving you the option of restoring your PC, or to exit the process.
If you do not see the blue stripe, the PC Restore feature is either not present, or has been disabled. There are a number of things that can disable the feature, in particular, any procedure that re-writes the Master Boot Record. This document by Dan Goodell goes into a great deal of detail about the operation of PC Restore for Windows XP and how to fix it: Inside the Dell PC Restore Partition. If you manage to get PC Restore to work, remember that it is an image of the hard drive as was originally delivered by Dell. If you have changed any of the hardware since you have owned it the PC Restore image will not have a driver for it. It is therefore best to return the computer to the condition in which it was received before activating PC Restore.
If PC Restore is not functional, and you cannot repair it, your only recourse is to use the Windows XP reinstallation disk you made to delete the existing partitions, reformat, and reinstall your operating system and applications. Dell has a page here with links to the various restore options: Restoring or Reinstalling Windows on a Dell. Forum member natakuc4 also has a document that goes into much more detail: A Clean Install of Windows.