For many companies faced with aging computer hardware, the attitude is: out with the old, in with the new. But there is plenty of sensitive data on the hard drives of those old models that could potentially hurt a business if it fell into the wrong hands.

Whether your company is dumping a series of aging PCs or simply want them to run as smooth as they did the day they arrived in the building, there are certain rules to follow when wiping your hard drive before tossing your PC. Some companies make the mistake of simply trying to uninstall their problems and manually delete important or confidential files. But be forewarned: there's always a way to retrieve data.

This following guide will help you wipe your hard drive clean and install a fresh copy of Windows XP before you donate it to a charity, relative or coworker.

Step 1: Back up your important information

Be sure to back up your most important (and irreplaceable) files before formatting your hard drive. Usually, these are files such as documents (e.g. Microsoft Word files), spreadsheets, presentations, address book entries and calendar appointments, important email messages, Web site bookmarks and personal digital photos.

If your computer has a CD or DVD writer (a.k.a. "burner"), then you can use the disk copying software built into Windows XP, or pick up more sophisticated programs to copy this content to the disk. Important: make sure your burn onto a new disk was successful before formatting the hard drive. Better yet, make two or three copies.

Alternatively, you can copy data over to a USB memory stick or upload it to a "virtual" drive on the Internet for a small fee.

Step 2: Prep for the format

Unlike past versions of Windows, which had you create a start-up disk to reformat your hard drive, Windows XP handles this in an easier fashion, providing the disk when you purchase your computer. But there's one caveat: you'll need to find your Windows XP disk. The good news is you'll need it anyway to reinstall the operating system after the format.

Before you begin, make sure your computer is set to Boot to CD. You can see if this is the case by looking into the BIOS (basic input/output system) settings when the computer starts. Tap the F10 key when your computer is starting and you'll see the BIOS settings; under Boot Order, make sure the CD-ROM is set to "boot first." Save settings and exit.

Step 3: Format the hard drive

With the Windows XP CD-ROM in your drive, restart the computer. If you've done everything correctly, you should be prompted as follows: Press Any Key to Boot from CD.

During this setup process, you may be asked to delete any partitions on your hard drive (if you have any). Follow the instructions and eventually you will have just one option: Unpartitioned Space. Press Enter to install Windows XP.

When asked how you would like to format the partition, choose the command "format using the NTFS file system." After this partition is formatted, Windows XP will begin to install itself and will reboot the computer until the operating system is finally installed.