Hi Edgar!
The problem you have is the software. Personally I don't trust recovery CDs. What that message means means is, there is no Operating System on the Hard Disk. Therefore, the solution is for you to have a New OS installed. How..??
please find an Original Windows CD and install your win XP. Dont use the dell Recovery CDs. I dont trust them. They are helpful but too many problems in future. Remember dell is not very friendly when it comes to Drivers. Make sure you use the other CD for Drivers, otherwise it will make you spend some good number of hours finding drivers Online.
Feel free to post back if it does not work out.
All the best.
Edgar