If you install an OS with an existing one already on the hard drive, I believe the computer will put all of the old files into a different folder. I did it once and it put the old OS into a file called "Windows Old".
If you want to make sure everything is like new, you need to reformat the drive which is very easy assuming you have an Operating System disk.
You can buy a new operating system either online or in stores. I bought Windows 7 home edition for 100 bucks.