Yes you can, yes you have to format if you don't want a dual boot setup.
Make sure you have all the hardware drivers for XP burnt to CD before you do
the format.

A few things have to be considered:

- Warranty - if you still have warranty on this machine - will this upset
that balance?
- Hardware drivers - does Dell supply drivers for Windows XP for that
laptop?
- Licensing - do you have a legitimate license for Windows XP to utilize?
- Other software - do you have installation media for any other software you
own to install it onto that machine...

Yes - to go from Windows Vista to Windows XP is a clean installation
endeavor.  You will be formatting that laptop in order to install Windows XP
on it.

Try to keep the DELL Diagnostic partition, usually labeled DELL UTILITY.
This partition is O.S. independent.

If you see another small partition it might be a pc restore partition,
this will be specific to the O.S. that was delivered with the machine.
You don't have to keep it, even if you do want to go back to Vista. Just
make sure you have all your installation media before you remove it.

Regards,

Andrew Leith.

You boot from the winxp cd, and delete the partition