Wiping it clean is OK I suppose, but that's only if your paranoid about viruses and spyware being on it. Too much work IMO. Myself, I'd prefer just getting in, uninstalling EVERYTHING that there is to uninstall from the control panel, then go back in to your explorer and delete any empty folders and such, then run a registry cleaner on it, defrag, clear browser cache. After all that, install AVG and run a full scan. Then proceed setting it up with the apps you like.
The reason I am saying this, is because of the situation you are in... no discs for recovery. But then, didn't you say it was a Dell? Depending on the model, alot of Dell PC's have a recovery partition on them that contain all the drivers you need, AND also have the OS install files in them. So you might actually have the install disc for it on a hidden partition and might not even know it.
It's a good idea, but I think that's the wrong way to do it.
On my (home built) PC, I have the recovery OS files on a secondary (external eSATA ) drive. This is the smarter way to do it because in case of hard drive failure, having the recovery disc on the main drive will do you no good. In my situation, if I need to change a bad hard drive(s I run mine in RAID 0 ), all I would need to do, is boot to the secondary drive by switching it in the BIOS, and install from there. Doing it from a hard drive is WAY faster then from a CD too.
Another thing I do (because I am a nerd), is I slipstream drivers, software, user, and product key info into the recovery install files. That way once the process starts, I don't have to wait around to enter additional info. I can start the process and slip out the door and head for the taco truck and a 6 pack of Bud Light Lime, visit some friends, screw my old lady, etc.. and when I'm done, I'll come back to a fully functional machine with all my favorite apps installed. No ******* around installing shiit all over again.
I do a FULL REFORMAT AND INSTALL 2x a year whether it needs it or not. But if you don't have the discs to recover, it's best to just clean it up and freshen it up, you'll still be fine.
However... if you DO want recovery discs, you could always download them from the internet via torrent and burn it to a disc for your own use. As long as you are using the original product key on the side of the machine and not some hacked version, your not committing any crime.
You can get Windows XP Home edition retail from here
http://thepiratebay....86%29_%28TPB%29
Or the Dell OEM version (which is what you most likely have on that machine) from
http://thepiratebay.org/torrent/4410910/Windows_XP_Home_Edition_SP2_x86_%28Dell_OEM_Disc%29.
.