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How to dissolve overlapping polygons?

I have a query regarding the dissolving of polygon features in ArcGIS 9.3. I only have the bare-bones license and an extremely basic knowledge of VB.

I have a large shapefile with around 4500 polygons and I want to know if there is anyway of dissolving the ones that overlap. I basically want to turn this layer into a shapefile that contains separate areas, so where one polygon is on its own it will remain, but where multiple polygons overlap, they dissolve into 1, with each separate area having its own set of attributes. The shapefile changes quite frequently, and up until now, I have been going through them all and manually dissolving overlapping areas using the editor tool; but I'm sure there's a much quicker way of doing it!

Any insight into how this might be achieved?

I've had a go using the dissolve tool and joining the exported attribute table, and this works perfectly! I thought the dissolve tool only worked on attributes and not spatial location, so that's extremely useful to know. Also the ModelBuilder code is

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@Tom Parker  - MWrenn is correct.  
You have the option of selecting an attribute to dissolve on (this will do an attribute dissolve) or no attribute (this will do a spatial dissolve).  

Choose the statistics and any attributes you want to carry over. (This is not going to quite work like you want).

![options][1]

Prior to doing the dissolve, create a new field and calculate the FID into it.  
Then export a dbf of your attributes and you can (somewhat join them back up with the polygons afterward).

If you need help with this let me know and I will post more screen shots or find some help on arcgis.com resource center.

Notice in the following screen shot, the name is the same in all of the polygons (9.3.1 doesn't seem to dissolve correctly from arcmap). Try it from arccatalog.

![after dissolve][2]

Maybe someone else will have a better method.

The only other way I can think of is to select by location (polygons that intersect each other).  
Export those to a separate file and then dissolve them.  
Then after you get each file dissolve you could use the free merge layers (in et-geo-wizards).

  [1]: https://i.sstatic.net/8ZQKl.png
  [2]: https://i.sstatic.net/Gn9Qw.png

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