Quick Moronic Computer Q. (XP reinstall)

I need some Doper help. Stat. Oh yes, and please.

I have a friend who has a computer that has been crippled with spyware. I’m no computer guru myself (As you shall see), but these guys are at the “where’s the ANY key?” level, and worse still at the “Wow, it says my computer is running slower than usual. and in big flashing lights. I’d better click that!” level. I have been over to her house several times in the last fortnight or so, bearing gifts of all the usual spyware removal programs, firewalls, AV programs, the works. Yet, the spyware problem is getting worse and worse.
The good news is that there is no critical data on the machine worth saving (it’s purely a surfing box), so I want to reinstall XP and be done with it. The computer is second-hand I think (don’t know the specs off-hand, but it was given to her for free so I assume it ain’t state of the art), yet it has an XP Home install on it that is only about a month old.

My question is simple (and stoopid):

*Does booting from the XP disk and doing a vanilla install actually format the drive, or does it simply overwrite Windows on top of itself somehow? *

It is important, given the situation, that the drive is formatted. I don’t care about losing data - I just need a virginal XP machine. My fumblings today had me at the recovery whatsit screen and then being told to bugger off because I didn’t have an administrator password to the current Windows installation (the guy who gave them the computer is not contactable). I quick call to my computer guru friend had him promising to bring a ye olde fashioned DOS boot disk on Tuesday. Do I need one of those? I ask this because his explanation that going in via DOS (I didn’t think that even still existed) would “get in under” Windows, thus circumventing the password requirement, but what I have gathered from some Googling this afternoon is that simply running the XP installation disk will automatically format the drive (I have already configured the machine to boot from CD-ROM).

Does it format or not?

Thanks in advance.

You get the option to do either. VERY straightforward affair to delete your existing partition and reformat the drive (If you want to, that is). Just make sure you have any needed IDE and network drivers handy. (If need be.)