Just had the same problem myself. I hope that youve been able to solve it by now so Im really just posting this if anyone else does a google search on "Error 00CE Machine Type and Serial Number are Invalid!"
The reason that this occurs is because IBM doesnt flash the bios with individual serial information. Truthfully its to make it easier for the user. Going through the ropes with IBM phone support I heard alot of false information about the way a computers BIOS works. Infact though it can be redone. These are the steps.
Follow the link for downloads and drivers.
After entering your information (by the way dont do the quick path or youll never find the hmm) download the HMM or Hardware Maintence Manual and the latest Bios Flash. Its important to get the bios update for the floppy disk.
First save the bios flash executable to c:\ if its not in the root folder it crashes. Then run the EXE and extract the bios flash to a floppy. Then read the HMM about the BIOS jumper block. For my 6350 it says...
To perform a Flash/BIOS recovery using the recovery jumper, use the following procedure.
1. Power-off the computer and remove the cover.
2. Move the system board Virtual clear CMOS/BIOS recovery jumper to the ROM recovery position.
3. Insert the upgrade diskette into the diskette drive.
4. Power-on the computer.
5. At power up, the system will make a beep sound and will show no video, as it starts reading from the floppy disk.
6. The system will continue making a series of beep sounds followed by a few seconds of silence. The whole process should last for a few minutes.
7. When the boot block recovery process is finished, the system will make a final long-lasting beep sound.
8. Remove the floppy disk, power off the computer (keeping power button pressed for around 5 seconds), move the recovery jumper back to the normal position and replace the cover.
9. Perform a Flash/BIOS update to re-enter machine type and serial number data
This maybe different for other models thats why its important to read your HMM.
After following theses steps you shouldnt have anymore Error 00CE problems.