From MS: "
Windows XP is primarily licensed for use on a single PC " The concept here (and it has always been this way with single-user or seat licenses) is that the
purchased copy of XP is licensed for use on a "single CPU" or machine
at a time.
I could install my copy of XP on a hundred machines, so long as the preceding machines had the installation removed with each subsequent new installation.
MS has allowed the misconception to persist that it is OK to tie the license to a particular serialized hardware combination, which is BS. Ultimately, the only "enforcable" provision of the EULA is the "one machine at a time" part. Look into the details of the hardware hash, with aging and component weighting. It's annoying & enlightening simultaneously.
So, as long as your Dell has had its copy of WinXP uninstalled, you are free to install that recovery copy (same license key) on to another machine. Keep in mind, the purchase price of the Dell
included a licensed copy of XP separately.
And, as a side note, being in violation of a private corporation's EULA is not the same as "illegal." That's reserved for governments to decide. If the EULA is written to follow the DCMA, for example, then those portions would then be unlawful to violate. All Microsoft can do is sue you; they can't arrest you...
The final arbiter of whether you are within the letter (or spirit, anyway) of the EULA is you. Go ahead & install that copy of XP. If you can still boot the Dell into Windows after that, you're in violation.
Scrub the Dell, and install Ubuntu. Or get Parallels & install Ubuntu in a VM on the Mac. Then find a boat needing an anchor. That'll make a good home for the Dell