You are comparing an 11" laptop to a 13" laptop. Screen size is a pretty major deal when pricing laptops.
And screen size isn't the only thing different between the two. As previously stated, the XPS has a 1080p IPS display. It blows the display on the Air clean out of the water.
Sorry but screen size is not nearly as important as you seem to think. You can get a $300 laptop at Fry's with a 15.6" screen. That doesn't make it better than any of the laptops we've been talking about.
The display on the Dell is clearly better than the ones on the Air. No argument. But I think you need to recalibrate your idea of how important a display is for a computer. If somebody had a 1440x900 display for their desktop computer and upgraded to a 1920x1080 display, you'd probably wonder why they'd bothered instead of thinking that the new experience blows the old one "out of the water."
But who knows, you might be a professional photographer and display resolution and quality is super important for your work. I won't claim to know.