You can use the system restore disk as many times as you want on your dell. Your mom is crazy. Even if you reformatted and totally screwed things up, you could always just pop the restore disks back in and dell would be none the wiser.
It is an OEM version. Basically it is only supossed to be installed on that machine as opossed to a retail version which could be put on more than one machine with licenses. That is also the reason why it is cheaper.
Pretty much right. It will work an unlimited number of times on your Dell system without entering the serial number. But you will only get three installs on another Computer using that serial number before it is blocked.