My 5 1/2 year old XPS 400 had the same problem. I tried everything on every forum I could find and nothing worked. After much experimenting HERE IS WHAT FINALLY WORKED FOR ME: Put the Dell OS CD into an external USB CD or DVD drive. The computer will recognize that. For some reason a lot of Dell computers won't recognize the internal IDE controlled DVD drives when the hard disk is replaced but, it will recognize an external drive. I bought a Vantec SATA/IDE to USB 2/0 Adapter for $18 plus shipping from TigerDirect and used an old extra internal DVD drive for my new external drive for the OS install. Everything worked without a hitch. I fully installed my OS yesterday from the old Dell OS Re-installation CD. Now my old Dell computer has new life and runs great! BTW, the same SATA/IDE to USB Adapter has allowed me to off load the data from the old drive onto the new (my problem was there was a hard disk error in the system file so the computer wouldn't boot up but, the data was still good).
It is bad media. Many newer DVD drives can read through scratches that older/cheaper drives cannot, but it is still your media.
Anyway ... glad you got it working 🙂
It wasn't bad media. It was an unsealed, unused CD in pristine condition. The drive wouldn't read it when it was an internal IDE drive but, this same 5 year old drive did read it when I made it an external USB drive.
OK, here's the scoop. I had the same problem. After trying things from here and other sites, came up with the real solution: This computer cannot boot from P ATA drives. I hooked in a newer cd rom with SATA and it booted right up from the cd.