Probably the best thing you can do is reinstall the OS and then go ahead and reinstall Dragon, then make an image backup of your primary hard drive. This way you can reinstall the OS and Dragon both at a later date without having to deal with their customer disservice should the need arise again.
In fact I would install the software that you use and depend on the most and then go ahead and do an image backup.
You can either partition the primary hard drive to make your backup drive or put the backup on another drive. Some imaging software will allow you to span your image over multiple DVDs so that would be a way to go also. I use Swissknife for partitioning/formatting drives, its freeware and works pretty well.
http://www.compuapps.com/Download/swissknife/swissknife.htmYou will also want to make a bootable CD of your XP so that you have some way of running the OS without booting from the corrupted hard drive.
http://www.nu2.nu/bootcd/