This sounds like a nasty situation you've stepped into and it sounds like it'll only lead to worse...
Companies like Dell, HP, and others purchase special OEM licenses from Microsoft so that they can distribute more easily. While these particular licenses are cost effective for the larger companies, they make it rough for the consumer who often only gets a crappy restore CD loaded with junkware.
Getting a copy of Win XP Media Center can lead to potential license issues unfortunately.
See here for more details:
http://www.aviransplace.com/index.ph...ct-activation/
In a nutshell, using your COA key with a generic OEM or Retail copy of XP Media Center
potentially could lead to you making a phone call come authentication time.
Personally I think you are suffering from a hardware issue if this system totally wasn't working even somewhat correctly right out of box. If I were in your situation, I'd see about returning the machine to Dell and talk to some of your IT people about getting you something built by one of them instead... or get a custom built machine from a company who backs the whole box with a one-year warranty and get an OEM license of XP for it.
Either way, if the machine is still under warranty, I'd still pursue the RMA route which often you'll find the vendor will troubleshoot because the last thing they want is for you to return the machine.
How ya doing, buddy?