To reformat, when the computer is starting up, go into "Setup" or BIOS, and look for a first boot device, set it to CD-ROM, hit F10 and tell it to save changes. Make sure the XP install CD is in the drive. The computer will boot off this. Once the XP installer loads, tell it you want to install, follow the steps, and when you get to the part where it wants to install XP, it will ask you to create partitions or to format the drive. Make sure you format it as NTFS.
These directions are a little general, as I haven't done it in a while. But they should work just fine.