Formatting a computer will NOT resotre the computer to factory fresh. The "factory" has software pre-installed. Some versions of the XP disc are modified to install these applications during the install procedure and as a result are give a VLK and when you go to activate - Sorry, your copy of Windows is not genuine. Will appear (eventually)
I don't see a problem with installing from a backup copy of Windows, I've had to install Windows so many times, I damaged the CD physically somehow.
6 Floppies DO exist, but to come by they are hard to get. They are the equivalent of DOS/9x recovery discs to get into a command prompt.
The sites I have given are not useless. I gave the link to someone and they didn't know what to do, I go there and I have no problems.
Formatting with an actual copy of Windows will have a bare install of Windows meaning, drivers will need to be installed. No sound, no usable graphics, printer (where available) not functioning, office applications (if available before) will not be there, and internet connection (if DSL) will need setting up