Protecting Your Data During Computer Disposal
There often comes a time when you wish to get rid of older computer hardware. Sometimes you're getting a new computer, sometimes you're just buying a new hard drive, but whatever the reason, you should stop and pause before simply tossing your old hard drive or selling your computer online. Depending on your usage habits your hard drive could contain lots of sensitive personal and financial information. You should take steps to destroy that data before letting anyone else get a hold of your hard drive.
Removing data from a magnetic disk is a bit more complicated than simply "erasing" the disk. Hard disks store data in sectors, and often when a sector is "erased" using normal methods the flag that says the sector is empty or full is just reset to "empty" which tells the computer new data can be written to that sector. This doesn't actually remove the data from the disk and many utilizes exist to search over "empty" sectors looking for data.
Some people advocate a "low level format" of a disk to erase all data. Low level formatting is an option you have to pick from your BIOS menu when the computer boots. Low level formatting rewrites drive structure information. Users should be wary of low level formats because in newer drives this option only verifies the read/write capability of each sector but doesn't change the sector's contents at all. Many manufacturers actually advise against a low level format on their drives with warnings on the drive casing. What a low level format does is destroy the indexing information on sectors, but again, doesn't actually change or overwrite the data in each sector (this process is referred to as 'zero filling' in which every sector's data is written with zeroes). Many free forensic utilities, including bootable CD's such as Helix, include software that can be used to recover data from a disk formatted in this manner.
In order to properly obscure contents of a hard disk it is necessary to fill each sector with completely random data. Simply reformatting a disk will not accomplish this since format writes a uniform value to every sector. The reason for the need for random data is that if every sector is overwritten with a known value it is possible to examine residual magnetism and recover the initial state of a sector. There are many free utilities that can be used to perform this function, but Darik's Boot and Nuke (DBAN) is one of the more widely recommended. This tool will allow you to create a boot disk that can properly wipe your drive.
If you're interested in a more technical discussion of this topic please see http://www.cs.auckland.ac.nz/~pgut001/pubs/secure_del.html.