Background:

Bought two identical notebooks (Dell Vostro 1500) for downloading movies and
play back on my big screen TV.

Both have Nvidia Geforce 8400M GS and I am using Nvidia “ n View�
application to enable S-video port and connect to my TV.

Problem Statement:

One notebook has XP that works perfectly fine with n View and I am happy
with it.
The other has Vista and I can not use n view or any other application to
even detect my TV.

My solution (I am open to any other ideas):

Downgrading from Vista to XP home edition SP2 Ver 5.1.

Questions:
1. Can I use Dell Reinstallation CD for XP to downgrade Vista machine?
2. Am I going to run into licensing and activation issued with Microsoft?