It used to just show up under My Computer as FreeAgent...then I could click on it and retrieve my photos (I'm a photographer and I need to edit some photos in CS4).
From what you've posted, it appears that you may have two issues. In the past your external / USB drives probably showed up as drive letter "E" because your DVD drive was "D" (and if you had both plugged in at the same time, the second one would be "F"). Either your laptop isn't seeing the DVD drive now, or XP assigned another drive letter. So, can you see the DVD drive? Look in device manager for an unrecognized device. You may need to load the drivers from the original driver disk or Dell's site.
*Note that if your optical drive is recognized, you can change the drive letter that Windows assigned in "Disk Management" by right clicking on the drive and selecting to change drive letter.
The second issue is with the FreeAgent drive... obviously don't reformat or you will loose your data. The first troubleshooting step is to connect the FreeAgent drive to another computer and see if it's recognized there.