Reformat C: and Restore Vista

I am trying to help a friend with her computer and I am stumped. I haven't much worked with Vista before.

Computer:
Dell Inspiron 530S running Vista Home Basic

Problem:
After doing a system restore, once I go into "My Computer" the 220G hard drive is only showing 42G of free space. I do not have a restore disk. They evidently did not make any, and they have restored this system before and messed something up. In order to restore, I burned a Vista Bootable cd from somewhere on the web. I can boot from this CD and if i choose install it comes up with a error due to copywrite stuff. I can access the repair utilities through this CD though. The way I manually do the restore is through the command prompt.
D:
cd tools
imagex/apply d:\dell\image\factory.wim 1 c:\
And this process starts the system restore, only to find the wasted space on the drives.

Question:
Can I boot from CD, go into command prompt, run the cipher command to reformat the C: drive, and then restore/reinstall from the Factory image?

I have been on here for days trying to figure this out. If I reformat just the C: then it should not affect the recovery partition. I'm just unclear as to if the recovery partition, and the means I mentioned above will Reinstall Vista.

Thanks in Advance

Jason :ohyeah:

Your system has OEM Bios which means that your windows is authenticated from the bios itself. So you cannot install a pirated copy of the operating system. Second things every branded system comes with an recovery partition. There is a way to restore your operating system if you had not formatted the entire hard drive. For that use Windows Live CD. This is an bootable disc which will give you a desktop without any installation. Copy your data and check that is there any recovery partition stored. You just need to press the default keys to run the same.