Is the drive a CD drive or a DVD drive? The Windows 7 install disc is a DVD.

Create a bootable DVD disc and see if that will boot from the drive.

Try using a Digital River .iso to create a bootable USB:

http://dellwindowsreinstallationguide.com/download-microsoft-windows-and-office/download-microsoft-windows/windows-7-sp1-iso-download/

See also my Windows Reinstallation Guide/A Clean Install of Windows 7:

http://dellwindowsreinstallationguide.com/

Use the following drivers for best performance:

http://dellwindowsreinstallationguide.com/driver-sets/vostro-laptops/