Well...have you read the Dell documentation for your system...which indicates how to install, the effects, etc.?
I don't believe that you will be able to do a repair install with a CD reflecting SP1...since your system reflects SP3. But Dell systems don't necessarily play by the rules of owners with MS Genuine XP CDs...which is why you need to consult your system documentation to see what your options are.
If you tell us the model, I will review the system documentation and state what I see as your options.