http://www.petri.co.il/forgot_admini...r_password.htm

I would also do as rik suggested and contact Dell to see if you can get that warranty transferred as you are now the new owner.

If you had an XP disk you could just install over the existing installation, but if you are going to do that, you should simply start from scratch.

I personally would format just because I wouldn't want to be responsible for any files that were left on that computer... and privacy issues/viruses/spyware/adware etc...