Save everything you want first onto disk (floppy or CD) Will the XP disk be an upgrade or full installation disk? click here for help with program issues. If you have had the machine for 3 years then a clean install (in my opinion) will be the best way forward.
Its a lot easier than people think, set your BIOS to boot from CD, whilst your machine is booting up look at the screen for an indication on how to access startup. A quick search in the Dell newsgroups say You have to press the delete key during the full blue Dell screen.
This will take you to the BIOS (basic input operating system) once there you will not have a mouse to play with, it will be your up and down keys and home and end keys.
You are looking for 'boot options' use the keys to navigate, once you highlight boot options you will see what is set to boot first, yours is more than likely set to FDD first. You want CD, so use the down key until CD is highlighted and pressing the shift key at the same time click the up arrow till CD is at the top.
You need to save changes and exit (usually F10).
Make sure the XP CD is in the drive and when the machine boots it will ask you to hit any key to boot from CD...do so.
Just follow the installation prompts. You can format with the XP disk, it offers you the option. I would select format NTFS.
Input all your personal data and go and make a cup of tea.