It's late so I'm probably misunderstanding, but I believe Mike is trying to run the System Recovery DVD's that the dell utility created for him (basically a recovery partition on DVD's) and not a backup restore (tho that would have been nice to have).
Windows 7 install files easily fit on one DVD.
But even if the DVD's work you may have a problem in that the partitions might install to be the same size as on the old hard drive
(because they were a partition image) instead of expanded to fit the 1TB new drive.
Let us know what dell has to say.