You cannot format the drive from within Windows. If you want to reinstall Windows, you can wipe and format the drive using the XP Reinstallation disc. Follow Denny's Windows XP Reinstallation Guide. Read carefully and follow the links he's given to ensure a good reinstallation.

You'll also want to refer to the reinstall guide for your system to install drivers and applications. To find that, click Desktops above, enter your service tag number and select Reinstallation Guide from the drop-down list. The order of reinstallation is as follows:

1. 
   
2. Windows XP, then SP2 and critical updates,
3. 
   
4. Chipset drivers,
5. 
   
6. Video drivers,
7. 
   
8. Audio, network, etc.