Where as Windows only looks at the Main Partition in this case here.
So when you instructed Kill Disc to Wipe the HDD it wiped the entire HDD not just the Partition that Windows was located on. Dell like other System Makers have started to incorporate Recovery Partitions to save money in not having to supply install Media. to the individual the cost isn't much but to a place like Dell that's a lot of money when you consider that it is spread over the entire life of that Model.
When I worked as a Design Engineer the Car companies where desperate to save a fraction of a cent per unit as this was a major saving to them. Here with a Recovery Partition the savings are measured in a $1.00 or more per unit so that is a Massive Saving to a place like Dell. Say they make half a million units of this model that is the best part of a Million Dollar saving to the company.
So Kill Disc didn't work twice on the one pass it is to do with the way that the different utilities address the HDD.
But none the less the Recovery Partition while being nice isn't Important and the one big problem with this is that when the HDD Fails you also loose the ability to reinstall the OS as a new HDD doesn't come with the Recovery Partition already installed. So consider this as a New HDD having been fitted here what you have is the same as a Brand New Totally Blank HDD to work with. As you can Boot off a CD the Optical Drive is working and if necessary you can make a Boot CD or DVD to run some Applications off. However as there are already pre-made ones grab yourself a copy of the Ultimate Boot CD from here
http://www.ultimatebootcd.com/download.html
Burn it to a CD and drop it into the Optical Drive of this computer and start the thing. It will display the Ultimate CD's Menu and you can use this to do quite a lot of things like Test all of the Hardware with the proper Tools instead of those supplied by Dell Format the HDD in the form that you want as apposed to what the Slipstreamed Recovery Disc allows and other really useful things like that.
Also you can enter the BIOS here and change the Boot Order to Optical First then USB and finally HDD. That will allow you to Boot off a CD/DVD, a USB Thumb Drive and finally the HDD. While it will slow down the Boot procedure every time you boot the system it will only be a few seconds max and more likely a fraction of a second every time but you get a far more versatile system which does as you want instead of how the Makers believe you need to use it.
Even if you buy a New HDD from Dell here you will have exactly the same conditions as you currently have so there is no benefit unless the HDD has suffered some form of damage as stated by it's Makers Testing Utility these are also on the Ultimate Boot CD so it doesn't hurt to test things while you are waiting. :)
Also because this is a NB you should buy a Cool Pad to go under it. These do two things they keep the Airways inside the NB clean and allow far better cooling as there is no dust and other rubbish getting sucked into the when it is running and they insulate the Air Intakes from anything left on the desk top so that things like pieces of paper [b]Can Not[p/b] get sucked up and block the Air Intakes. A Cool Pad looks something like this and is powered from a USB Port
http://www.antec.com/uk/productDetails.php?ProdID=75004
While I personally use the one listed above if you look on E Bay I'm told you can pick then up for about $20.00 they will extend the life of the NB considerably and easily outlast the NB. They also help prevent the HDD's in NB's from overheating which is one of the biggest killers of NB HDD's.
If you want to boot off a USB Thumb Drive you need to copy the Actual Boot Files to the Root of the Thumb Drive so do not copy them into a Folder or the Computer will not be able to find them so it can start running off them. You can however leave the Utility Executables in Folders and using the DOS Command Prompts [b]CD Change Directories[/b] and access & run these Utilities although it is probably just as easy to copy everything required to the Root of the Thumb Drive as none of these need to be [b]Installed[/b] as such like what happens in Windows. All you need do is type in the Files Name at the DOS Prompt and press the Enter Key and that Utility will start to run.
I think I covered all of your questions here but if I missed something or you want more help just post back and I'll see what I can do to help.
Cheers
Col