My IBM ThinkPad came with the common "cost saver" of a recovery partition instead of them spending the extra 20p to provide a full CD. So when the HD died, there was no recovery route.
I fitted a new HD, installed XP from the CD that came with my desktop machine (proper one, see!) then when the laptop asked me to contact MS to "activate", I explained to the nice lady, and read the code off the C of A stuck to the laptop. She gave me the code to activate, and all was well.
Atlas - you don't have a $3000 paperweight. You might need to buy a new hard drive (maybe $100 if you splash out), fit that, then install from a "clean" copy of XP. If the worst comes to the worst, you buy a whole new copy of XP. You're still $2,500 better off.