Have you previously re-installed an OS on this machine? If so, I'm pretty sure that wipes the Dell factory-installed Master Boot Record and the restore partition. If you get that "blue bar" across the top of the screen when booting (if it's in a healthy enough state to get that far), then that should mean you still have the factory-installed MBR and should be able to boot to recovery. Aside from that, getting the timing on hitting ctrl-F11 at the right time can be tricky, in my recollection, but it is known to work. I've definitely used it once or twice.
Definitely don't install XP - it's end-of-life and there are no more patches.
Hope this helps some.