Amogh, sorry for the delay work has been crazy the last week or so and it just seems like that time of the year for servers to start breaking down...
Anyway, I ran every diagnostics available on the PC and they all Passed. I also ran a few other HDD Tests that I have on a Boot CD (like HDAT2) and they all passed as well. I also drained all the residule power as you suggested...
So then I attempted to boot into safe mode and that's when things started getting a little strange. So I turned on the PC, and began hitting F8 when the Bios Loading and Dell logos appear. So on the very next screen it shows "Please Select the operating system to start:" and the only option available is "Microsoft Windows XP Embedded", which is strange because it's really Vista. At the bottome of that screen it also says, "For troubleshooting and advanced startup options for Windows, press F8".
So I hit F8 and now I get the options to boot into the different safe modes. And if I try clicking into any one of the Safe Mode options it takes me to another screen where it asks me again what "OS" to start, and the ONLY option showing is "Windows XP Embedded"... So I hit enter on that option anyway and I can see the drivers loading, then bam... BSOD (*Blue Screen).
The Error showing is: 0x0000007B (0xF798C524, 0xC0000034, 0x00000000, 0x00000000)
The last time I remember seeing this screen and what seems like a simlier error code, was when the HDD went on our old desktop. Do you think it's probably a bad HDD..?
Also, in following the link you posted to restore to factory defaults, when I hit F8 like before to get to the Advanced Boot Options, there is NOT an option that says, "Repair Your Computer". So I'm not sure how you would restore back to factory defaults..?