I advise clean installation of Windows 7 with a Digital River .iso and the Activation Backup and Recovery Program. See my guides here for details: [URL] [URL] [URL]  
Just took delivery of a XPS8700 with Windows 7 installed.  There is no restore partition on the hard drive.  I created a Backup and System Image using the W7 Backup and Restore program.  When I attempted to "create a system repair disc," I got the following pop-up. "Microsoft Windows Repair Disc has stopped working" and had to close it.   I have W7 on three other computers in our home and have never encountered this before.  Since the 8700 didn't come with any windows discs, I'm concerned that I can't make a repair disc.  Would appreciate any direction since I'm not having any luck.  The only thing I was able to do is create "Windows Reinstall Discs."  Thanks.
Can't create Windows 7 System Repair Disc on New Dell 8700