The key at the bottom is likely to be an OEM key and will only work with an OEM disk. You can contact the dealer and they should provide you with the disk, or even better a restore disk. Failing that you'll have to procure one, legally!
I'd suggest you install Linux in some form, check out Ubuntu Netbook Remix, (google it, it's a free downloadable operating system) you can quickly install it onto a memory pen or cd and run from that to test it, try and I bet you'll be surprised and love it! Ignore what people say about linux just check it out for yourself, what have you got to lose?
If you dont like it, you can ask around local IT shops to see if one will borrow you an OEM XP Disc which may work, or for a fee they can reinstall it and it should be cheaper than you buying the operating system.
When I say 'should be cheaper', I am referring to Microsoft Authorised Refurbishers (like me) - we get licenses for a fraction of the cost to refurbish with so it should work out a lot less than buying a retail version and doing it yourself. Be sure that the shop is a Microsoft Authorised Refurbisher though, don't get caught out by dodgy dealers! If in doubt let me know your area and I can reccomend one to you, and hey you might even be in our area in which case I'll do the job for you!
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Do you mean that you want to recovery the system to back to the normal operating system?
I know my windows CD must be old now, but it is so expensive to go and buy a new one.. even if I have the Code key, they still want me to get another one, but pay for it. I only use my laptop to go on to the Net, and maybe play a few games. What can I do. ?
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