you need someones xp home cd. i only have xp pro but i assume its the same. when you boot the pc with the windows disk in, the install thing should boot up. before you can reinstall windows you will have to format the computer with the NTFS file system (NOT FAT32). you can either do the quick one or the long one, probably doesnt matter. if you have time, i'd let it do the long one.
that is a utility with the xp cd. as far as i know you can use someone elses xp home cd with your key, it definitely should work. and thats NOT illegal (in reply to whoever stated that above). you can always email microsoft and ask.
edit: if you have a Dell, or an HP, or something like that they did not give you a complete windows install disc. if that is the case, and there are 'dell windows' disks, or whatever then you will need to get dell discs from someone else. another companys wont work. i dont know the specifics on how all that works, but i hate all those companies and build my own computers because they're cheaper with better hardware (and faster). if you just had a regular windows cd it will be easiest for you. (those 'recovery cds' and stuff are all for those ppl with dells/etc)