Sorry to hear you got that problem, I had the same problem awhile ago, and I had to do a clean format of the drive to solve it.
I guess your problem right now is booting up the CD. I'm not familiar with what software Dell ship, but usually, Brandnames computer would ship recovering cds (those that contains the ghost of your computer when you first bought it) as well as a stand alone copy of Windows. If you cannot boot from Win XP cd, maybe the cd is scratch, or corrupted, try booting from the Recovery Disc 1.
If your computer doesn't seem to boot from CD, try to get into the BIOS and make sure CD is 1st in the boot sequence.
Also, you said that you zeroed the harddrive, what software did you used to write zeroes to the drive? Most drive manufaturerers have boot diskettes that contains programs to format your harddrive and make it bootable. If you don't have the diskettes, then download the utility off of your harddrive manufaturers' website. It doesn't hurt to reformat and partitioned a drive that is already blank. This time, when you format, make sure you choose for it to check and fix your Master boot record, if you really have a harddive problem, then it would appear here. If not, Then your harddrive is fine.