If you format the hard drive, you will need to re-install an OS (Vista, XP, Linux, etc). Do you have the disc for the OS you want to install? Norton is good, Vista is bad.
Yah formating your hd will wipe it clean, you might wanna dban too, though it's not needed just depends on how paranoid you are... reinstall your os, and you're good to go. for the paranoid http://www.dban.org/