As long as you have the legal authentication key, it's generally legal to create a single backup Windows XP CD for reinstalling the operating system on your computer. In this case though, unless your friend's laptop is a DELL, it probably won't install. Dell CD's have a special "marker" which will ONLY allow them to be installed on DELL computers.
If your friend has a Recovery CD, then that will include the full reinstall package including Windows XP. Likewise, if the laptop is a brand name computer, your friend should be able to contact the manufacturer and get a Recovery CD to use.
Hope this helps.
I may need to reformat my friend's laptop, but she doesn't have the CD's that came with it. She does of course have the registration key. So, what are my options about reformatting the hard drive and reinstalling Windows? I'm not looking for anything illegal. I do have the OS CD that came with my relatively new Dell desktop PC, so I'm wondering if I can just use that CD and her registration key. Both of these computers are running the Home version, by the way.