"Ive looked on Dan Goodell's site and can see how to get it back, but not what it actually IS."
That's easy to find out. Just boot the DellUtility partition and look for yourself.
"i want to dual boot linux and XP and this installs GRUB bootloader, which overwrites the MBR, which makes me unable to boot to the utility, i think."
The DellUtility partition is booted by the bios, not by the MBR. It will still work, even if the MBR is overwritten. (FYI, Dell shipped systems for several years with DellUtility and generic Microsoft MBRs. Dell didn't go to a custom MBR until the advent of PC-Restore.)
The DellUtility partition is required to be there by PC-Restore and MediaDirect. But you don't have MD and are eliminating PC-Restore, so DellUtility is expendable. It merely runs the same diagnostic program that is on the Utilities CD or can be downloaded from the Dell website.
Eliminating it will require adjustment to your XP boot.ini file. Some utilities like Partition Magic will automatically adjust it for you, but others like qparted reportedly do not, so you'd have to do it manually. (This is assuming you're keeping the existing XP. If you instead reinstall XP after the partitions have been readjusted, the installation routine will build the correct boot.ini.)
"i tried before to boot to it but Acronis kicked in before."
During POST (Power-On Self Test) you'll see the blue-on-black Dell logo and the F2/F12 prompts in the upper right corner. That's when you press F12. When POST finishes it will present the bios boot menu, giving you a choice of which device to boot from. If no F12, it doesn't show the bios boot menu and (as typically setup) boots from the hard disk. That's the first place Acronis can have any influence, so if you saw Acronis kick in, that means you missed the bios boot menu and were already booting from the hard disk.
"Kinda like a screen where you can test all the pcs components right? ... it looks pretty useful and im gona try to keep it."
Right. It's always available on the Dell website, so it's not that important to keep it on the hard disk, and it does take up a slot in the partition table, but it's small so most people don't bother with it and leave it alone. I recommend leaving it there unless it starts getting in the way or you need that slot in the partition table.