When you place the recovery disc in the drive, it will probably just run.
Just follow the prompts and let it complete its job.
The key should be on a sticker on the side of your PC somewhere.
If not, click here and download this utility. It will reveal your product key. CAREFULLY note it down. Once you start the recovery, you won't get a second chance.
DO TAKE NOTE of the warning you received. ALL your data will be lost, therefore make sure you have backed up EVERYTHING you need. Not forgetting your address book, favourites, passwords, Internet account details etc.
You will also need to reinstall any additional programs you use, that you have added to the PC.