I recommend that you install XP then as it ensures that the correct drivers are available.
When you have the XP disk do the following please;
Change the Boot Sequence in your BIOS
Reboot the system and at the first post screen (where it is counting up memory) start tapping the appropriate button that allows you to access the BIOS ( F1, F2, Del or F8 etc)
This will enter you into the BIOS/CMOS
Find the Advanced area and click Enter
Look for Boot Sequence or Boot Options and highlight that click Enter
Now highlight the first drive and follow the directions on the bottom of the screen on how to modify it and change it to the DVD/ CD drive
Change the second drive to the C or Main Drive
Once that is done then click F10 to Save and Exit
You will prompted to enter Y to verify Save and Exit.
Place the XP disk in the DVD/CD drive.
Click Y and the system will now reboot with the new settings.
Follow the on screen messages to install XP, be sure that you choose the Full NTFS format option as it will help with a clean installation.
Additional information for you to read while you are unable to carry out the installation;
Dell are very picky about driver installation and they must be installed in the correct order once you have installed XP, how you obtain the correct drivers http://support.dell....drivers_program
and the order in which the drivers should be installed http://support.dell....4&isLegacy=true
Can you tell us what version of XP it is please so that we can check it will recognize a 1TB HDD.