I'm not positive about the legality, although I think what you're doing doesn't go beyond what I would consider "fair use". I wouldn't keep two hard drives in the system, both with an OS on them, though. Windows can get pretty confused when their are two sets of system files, and what it thinks are two "primary" hard drives. I don't mean to frighten you, but I've had some really wicked problems when trying to boot a system when both drives have a full OS on them... namely Windows moving the swap file to the second drive and making the first unbootable.
I'm not sure what your plan is... but if you are just keeping the other drive to swap your files over and maybe use it as extra space, I would say once you boot up using the new drive, delete the windows folder on the old one...or better yet, reformat it and start clean.
I would think a Dell Windows CD would work fine, as long as it is a Windows CD only, and not an image CD. Some Dell computer ship with a full compressed image, which means the OS, software, loads of junk, and drivers and settings for a different computer. This could cause all kinds of problems. Sound like your's is just windows with maybe a little Dell spin on it... so it will probably be just as good as a normal Windows install. Just uninstall any Dell software that it puts on, and you should be golden.
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