I think this thread might give you some help: Restore Vista Factory Image. The last post on the first page by tgsmith gives you details on a manual restore that should be helpful in your case.
Edit: I assumed you have Vista as you are attempting an F8 restore. If I'm wrong, and you have Windows XP, you need to press CTRL and F11, releasing both at the same time, during the Dell screen on starting the computer.
Welcome to the forums Kris
Here's another link which should help you: Restoring your [Dell] computer to the factory settings.
You may also find this Driver Installation Order article helpful?
From experience, I've found that: “Beauty is in the eye of the beer-holder”!!
Smoke Grey Magnesium Alloy Chassis - with White LED Backlights
17" UltraSharp WUXGA Widescreen TFT (1920 x 1200) with TrueLife
Intel Core 2 Duo Processor T9300 @ 2.50GHz (800 MHz FSB, 4MB L2 cache)
4GB (2x 2GB) Patriot Signature PC2-5400 @ 667MHz
DUAL 512MB Nvidia 8800M GTX cards in SLi + 128MB Ageia PhysX
640GB SATA II (2x 320GB WD Scorpio Black 7200rpm)
8x Super-Multi DVD±RW
Creative X-Fi Notebook (ExpressCard) + Creative GigaWorks T40 Series II
Integrated 2MP Webcam
Dell Wireless 355 Bluetooth 2.0 Module
Intel Next-Gen Wireless-N Mini-Card
TV Tuner and Dell Travel Remote Control
4-in-1 Flash Card Reader (SSD/MMC/MS Pro/xD)
230W AC Adapter / 9-cell Lithium-Ion Battery
Windows 7 Home Premium (64bit)
Hi, I also am having similar problem, however the differnece is it is on windows 7 and when I go through the above steps, it DOES not show me any factory settings restore option. SOMEONE, EVERYONE please help