Our recovery disk is a small sub-set of a Vista installation DVD. It has the same front-end interface (it looks like a Vista DVD - It should do, it's the same MS software), but it has none of the installation files, so the "Install" button has no function at all. You can only use it to fix a broken boot on an OEM PC that only provided a recovery partition and no Vista disc.
Your PC, if I understand you, is still working. You just want to move the contents of your HDD to a new one ?
The OEM recovery partition should enable you to make recovery disks that can recreate your HDD in factory condition should you have a disaster. It follows, that the same facility can be used to recreate the HDD on a new drive even if the old one is still working.
Microsoft won't allow you to use both copies, you only have a licence for one. Validating the new one automatically invalidates the old, and it would be detected as a pirate copy if you were to attempt to use it in another PC, but provided that you're just replacing one with the other there's no legal problem
You need to take a good look at the facilities in your OEM recovery partition. I can't see how they expect you to use factory reset from CD/DVD if it's not bootable.
Did you make it using a built in facility ? or have you just made a manual copy of the contents ?