How do I reformat a hard drive and remove an existing partition in a Windows XP desktop?

Fist off put the windows xp disc in the cd rom.
make sure your bios is set to boot from cd rom first, not the hdd.
restart windows and select to boot from the cd
the install will start and check for existing version of windows. it will find the existing partitions, select the partition you want to reinstall to and delete or reformat it. If you delete it you will need to recreate it and then you can install windows to it.
Windows will strt to install, pretty much self explanatory from there, ie..filling in the information it asks for.

Unless your upgrading you can run a repair reinstall youwont lose your files but will need re-install all those updates.
remove all usb devices and connected devices including slaved hdd and most importantly the  internet
you can regester online later when you have your AV installed.
Make a backup of your AV installer
Using the xp  setup disc
boot into the bios first set the boot order to CD rom in the advanced HDO
 put your xp setup disc in the drive
F10 to save and exit
Reboots
Press any key to to start set up.
Follow the directions when you get to which windows highlight C and select foirmat
this will delete the partition and once it completes set up will continue

Here is some extra help illustrating the steps
http://www.webtree.ca/windowsxp/repair_xp.htm
http://www.theeldergeek.com/repairing_windows_xp.htm    

You can also slave this hard drive to another xp system
in control panel administrative tools computer manager disc manager r/click your slaved drive/format it or delete the partition. put it back in your system and start the install again.
http://www.theeldergeek.com/hard_drives.htm
Partitioning A Hard Drive During the XP Installation Process
http://www.theeldergeek.com/partitioning_during_cd_install.htm
Use only the COA that belongs to that mainboard you can only use the key for that system ok
or a set up disc that has never been regestered
Good Luck

Does the computer have a restore option during boot, usually by hitting F11, F12, or something like that.  If it does you can restore your computer to "like new", if it does not have the restore option then you will have to contact the maker of system and request a restore CD which will probably cost you around $10.

I would think your safest option is to get a restore CD.  I agree $30 is expensive for a restore CD but if it ends up being your only option then $30 is cheap to get a computer running again.

You could always try the friends CD with your key and see if it works, if not it might be time to think about the restore CD.

Microsoft may steer you away from xp since it's only available till windows 7 is out which is in a couple of months.
You can create a bootable restore disc yourself. Or a slipstreamed disc using the files off any xp disc you will need your COA though.
even though you may delete the partition,
 the regestered key you have for your system is recorded at Microsoft with an image of the maniboard components OEM of your computer
that's why a new xpcd would  resolve that
http://shop.ebay.com.au/items/_W0QQ_sopZ12?_nkw=windows%20xp%20pro%20-&_fromfsb=0&_trksid=m270.l1313&keyword=windows+xp+pro+-&tt_encode=raw&crlp=1029510325_55

do you have boot on this system?
SP3 or sp2?
http://www.winsupersite.com/showcase/windowsxp_sp2_slipstream.asp
http://www.helpwithwindows.com/WindowsXP/winxp-sp2-bootcd.html