You do need to activate you cd is OEM NON:SLP and if it have been used on another computer which I suspect it has been it is tied to that Machine. You should be using a dell OEM:SLP XP cd that will pre-activate, If you cannot find the dell cd all the information is available in stickies section to make your own.
Run the oembios.exe to check, but you may be able to activate with the oembios changer and the OEMBIOS CRC=B6F0EEFD set...worth a try..