HELP Need to put my laptop back to factory settings Inspiron 1525 Windows XP

My laptop works only in safe mode. I have tried F8, F12. It says i have no restore points. I have the CDS that came with the computer but that only froze the computer up and now all it does is show me my desktop back ground with no icons or start or anything. It does give me an error message saying This copy of Windows must be activated with Microsoft before yo can log on. Do you want to activate Windows now? If i say yes it freezes if i say no it restarts the computer. Help me please. I have really got to take some computer classes because my kids have cost me way to much in getting computers fixed. I have lost count of how many times i have had computer issues and had to pay some one to fix. Your help will be soooo appreicated. Thank you in advance. Angie