When you buy a Dell, the OS license is included with the system. It's what's known as an OEM license. It cannot be sold or transferred for use on any other system.

Your other XP disc, if you purchased it retail, is transferrable but will need to be validated by the transferee, most liley by phone. You could try selling it on Ebay.

If you want to use Linux, then you must buy a system that comes with NO OS. Workstations are sold this way, but not home systems like Dimension or Inspiron. At least not by Dell.

And further in the EULA
"13. SOFTWARE TRANSFER. Internal. You may move the Software to a different Workstation Computer. After the transfer, you must completely remove the Software from the former Workstation Computer."

This IS what I am going to do. In this case I do not need the extra copy, do I?

Merry Christmas!! Good luck with the new system.

Thanks for the clarification. I did probably read the retail EULA. I thought that there was no difference between retail and the pre-installed one.

I did read EULA.
This is the extraction from it:
"1.1 Installation and use. You may install, use, access, display and run one copy of the Software on a single computer, such as a workstation, terminal or other device ("Workstation Computer"). The Software may not be used by more than one processor at any one time on any single Workstation Computer."
I am not going to run it on more then one processor or computer at any one time. My old computer is broken for good, I do not use it anymore and I am going to transfer XP from the old one on my new one. Am I missing something? Or is it my poor English? Should I understand "at any one time" as to when it was run once on one computer it cannot be transferred to another?

Let's put it in another way. Suppose I am going to run LINUX on the machine. Is there a way to return Windows in this case?
Thank for the reply anyway

Very best wishes for you too!