If you have a bought a laptop ,chances are that it came with Windows preloaded onto the system. Unfortunately, many of these systems with Windows preinstalled do not come with a Windows setup CDROM.And if you have to reinstall windows then you are forced to recover from the recovery disks.
Very often, people want to reinstall a system to remove the crap that comes preinstalled on their system. If you have bought any PC or laptop from brands like Dell, HP, Acer, etc, you will know what I mean. The manufacturer typically installs tons of demo and trial software, toolbars and other junk that clutter up your system and slow it down. Uninstalling these programs take a lot of time, and even when it is done, there are still residual pieces of the previous installation littered across your hard disk and the registry. In such a situation, it is useful to reinstall a pristine copy of Windows, load the drivers and only the software you actually want to use.
This article from howtohaven.com has a clean tutorial for doing this
How to Create a Bootable Windows XP Setup Disk on a Preinstalled / Preloaded Windows System