It depends on how delicate the information on the drive is.
If you just want to simply clear it for use again then a format will do. Note that even after a format there is software/hardware that can retrieve data from the drive. If you want to completely remove the information then the best thing to do is to pull apart the drive and completely wreck the platters with anything you can find in your toolbox. It will render the drive useless but know one will be able to retrieve data from the drive.
If you want to keep the computer intact and sell it, use DBAN. This will destroy all the data on the drive and not just 'format.' Then you can install XP back on it and sell the pc to make a little scrilla instead of smashing up a harddrive and having a useless box. Download DBAN, burn to a cd, boot from the cd, and nuke the drive. If you have questions, let us know.
You can remove the data completely by shredding the drive. There are many free programs that can do this for you, but becareful, there is no way to recover data off a shredded drive as all the sectors have been changed to 0