Dell doesn't make "system restore" CD's. Unless they just started.
Anyway, it's no different than reformating a regular computer. Just boot from the CD (I'm assuming XP), run the setup program, and when it gets to where you choose the partition, delete 'em, create new ones, and format, and continue the install from there.
Once you get to the desktop, install the Dell Resource CD, and that will have all the drivers on it that you'll need (if XP doesn't already pick them up).
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