How do I efficiently recover my data? The hard drive was formatted and WinXP was installed but someone hinted to me sometime back that all data a hard drive has ever stored can be recovered, even though it was formatted more than once before. Can I recover my data (about 40GB of it)?

If the drive was formated using QUICK format then there may be a slim chance, but if a FULL format was used then it's gone.

There are any number of tools available on the net.
I can't recommend any as I have never been successful with them.

I have had success with WinUndelete. Check it out.