I think a clean install would be best here, too. I suspect that the data on D: drive would be preserved, yes, but best check with Dell Support for further guidance.
Back-up any personal data (none of which should be considered 100% trustworthy at this point) then format the HDD & do a clean install of Windows. Please note that a Repair Install (AKA in-place upgrade) will NOT fix this!
HOW TO do a clean install of Vista: See the "If you want to reinstall Windows Vista by performing a clean installation..." section of http://windows.microsoft.com/en-us/windows-vista/Installing-and-reinstalling-Windows-Vista (and/or contact Dell Support)
After the clean install, you'll have the equivalent of a "new computer" so take care of everything on the following page before otherwise connecting the machine to the internet or a local network (i.e., other computers) and before using a flash drive or SDCard that isn't brand-new or hasn't been freshly formatted:
4 steps to help protect your new computer before you go online
http://www.microsoft.com/security/pypc.aspx
Tip: After getting the computer fully-patched, download/install KB971029 manually: http://support.microsoft.com/kb/971029
NB: The McAfee free-trial that came preinstalled on the computer when you bought it will be reinstalled (but invalid) when Windows is reinstalled. You MUST uninstall the free-trial and download/run the McAfee Consumer Products Removal Tool before installing any updates, Windows Service Packs or IE upgrades and before installing your new anti-virus application (e.g., Microsoft Security Essentials; free).
If these procedures look too complex - and there is no shame in admitting this isn't your cup of tea - take the machine to a local, reputable and independent (i.e., not BigBoxStoreUSA or Geek Squad) computer repair shop.
~Robear Dyer (PA Bear) ~ MS MVP (IE, Mail, Security, Windows & Update Services) since 2002 ~ Disclaimer: MS MVPs neither represent nor work for Microsoft