Many purported security experts believe that reformatting a computer will remove all traces of data. That is just not accurate. Drives can be formatted and reformatted and will still have files that can be easily recovered with the right tools.
There are 2 primary ways to permanently remove data from a hard drive. One is destructive and the other is not destructive.
1) Use a degausser ( powerful electron magnet ) on the drive. This renders the drive completely useless and destroys the drive permanently. This will remove the data permanently. I highly recommend method 2) instead of method 1)
2) If you have Windows XP Pro, Vista Pro, or Windows 7 Pro or higher you can wipe the data from the free spaces on a drive. The first step is to delete the files. Deleting a file does not actually remove it. It merely removes the file entry in the File Allocation Table and removes the first letter of the file name. It also frees the block or blocks of drive space that the file occupied for rewrite. Next up you would open a command prompt and type in cipher /w:C: then press enter. This process will perform a government level wipe of the free space of your C: Drive. It can take several hours for the process to complete. What this does, is overwrite all free space of the drive with 0s, then 1s, then a random hex bit. This does permanantly remove any file that has been deleted. You can also remove individual files explicitly using cipher /w:C:directorynameoffile. Once a file has been wiped using the cipher utility there is no chance that it can ever be recovered by any means. Use with caution.