If you really want to totally clean up the hard drive, go to the website of the manufacturer of that hard drive, and download their program to make a utility disk to do a low level format. (For instance, I use Maxtor hard drives usually, and they have a utility called MaxBlast.)
Make their floppy and stick it in the drive and boot the computer. It will boot for you (depending upon certain settings - if it doesn't just post back) and you can wipe the hard drive back to zero's. XP will reformat the drive if you just boot with that CD, but it won't be as thorough. And if you're going to install a M$ OS on a hard drive, you want it as clean as possible before you start. There will be enough trouble without leaving anything else on that drive.
Then stick the aforementioned XP CD in the drive, reboot (depending upon certain settings - if it doesn't just post back), and install their operating system. BTW, give yourself about 3 hours to install it and fully patch it.
Don't leave your parents' computer vulnerable to so many easy attacks. And get them some good anti-virus software (
www.grisoft.com) - they're gonna need it.
And don't forget to remove the M$ spy-ware, such as Alexa. It'll be in your registry first thing. And disable the other stuff such as Messenger. Well...never mind.
That should pretty much do it!