A "military grade" format is when you writes zeros to the entire hard drive - a minumum of five times - to completely obliterate the original data. Modern recovery apps can easily recover data from a drive that's only been repartitioned and formatted, or even one that's had zeros written to it with only one pass.
This is very time consuming. A 5 pass write can take several hours - even a day or more on a large drive.
This is HIGHLY recommended before you sell or give away a hard drive that you had personal information on that you feel would be a security risk (think identity theft - lots of people scan used drives for personal data). You need to "shred" your data as well as shred your paper documents nowadays.
It's also good habit to use a "shredder" app to delete important files instead of just putting them in the recycle bin. Lot's of free apps around that do this. I use the Handy Bits file shredder.
HOWEVER a 5 pass zero overwrite is NOT necessary against viruses or spyware. If a full virus scan (preferably booting from another uncompromised drive) doesn't do it then erasing the the partition and reformatting is more than adequate. Any virus/spyware application that existed on the drive before the format is not in any condition to do any harm. The data that makes up the file might still be in there in unused sectors, but it's not organized in a manor that can do any harm to your new OS install.
The ONE exception is Master Boot Record viruses (known incorrectly as boot sector viruses). A regular repartition and format will NOT erase the master boot record, although a zero overwrite will (and one pass is enough). You can also do an FDISK /MBR but this is not recommended.
As noted here:
http://www.microsoft.com/resources/docu ... o_oxhc.asp
It's better to just scan the infected drive with a good virus scanner (best to install it in another machine and then do a full scan). All good virus scanners will clean the master boot sector of any viruses.
MBR viruses are pretty rare, however.
but the kicker is that this hacker destroyed the hardware like cpu and mobo
Impossible. A virus can't damage hardware. It can erase your drive, change your CMOS settings (the most extreme case of hardware tampering) and MAYBE if it screws up your CMOS settings it MIGHT (highly speculative) as a secondary effect damage something (let's say the CMOS settings change winds up overclocking or over voltaging your CPU and you cook it after some time). That's a real stretch though.
Most viruses are stopped by good common sense and a good anti-virus program that's kept up to date.
Most spyware can be stopped by just good common sense and a firewall (the default firewall that comes with XP is more than adequate for your average non-techie home user).
Nowadays I would also recommend running SpySweeper or MS Anti-Spyware in the background to block browser hijaack attempts and registry startup tampering.
BEWARE OF FAKE ant-spyware apps! This is very common now. At best they don't do anything at all, at worst they infect you with spyware. I only recommend SpySweeper and MS Anti-Virus now. Adaware and Spybot are also "acceptable"" but in my opinion they are not as good as the others. Adaware in particular seems to miss a lot of things, and they have questionable ethics lately (they seem to be in bed with WhenU spyware). Adaware and Spybot have been off my radar for 8 months now, although I used to rely on both heavily.
HOWEVER NO APPLICATION CAN PROTECT YOU FROM YOUR OWN STUPIDITY.
If you click on a suspicious link in a pop-up ad and your spyware blocker says you're doing something risky, but you click the "allow" button anyway, you're infected and it's your own damn fault.
It is NOT hard to avoid being infected. I print a copy of the following page and give it to my clients who chronically get infoected by spyware:
http://soldcentralfl.com/flyingpenguin/ ... _help.html