Motherboard and the new CPU should be compatible. The old one was a Celeron.
How do I update the BIOS in a situation where I can't boot? Do I have to the old CPU back in just to do that?
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Download the ISO for the Ultimate Boot CD For Windows. Burn to disc then boot the Dell with it.
Put the BIOS updater on a USB stick and have it plugged into the Dell before booting with UBCD disc. F12 during POST for boot menu.
Select the Mini XP option and when it's finished loading, run the BIOS updater. It may not automatically reboot. If so, just click the Start button and restart. It should complete the BIOS update.
Then you can put the newer CPU back in.
If you can't get it to boot from a CD, F2 enters BIOS setup. If you can't get into that, look up on the web how to clear the CMOS for this model. Then you'll have the defaults and will be able to get into BIOS setup and use the boot menu.
A word of warning, when you reset the BIOS, it switches the SATA drives to "combination" mode along with putting everything else to defaults. Unless you're running XP without the SATA driver installed, you'll want to switch SATA to the other option, and look through everything else.