How do I wipe out my whole PC and restart windows?

Boot to the your Windows CD and go for an installation that will format your drive. The steps depends on which version Windows CD you have.

I have xp... so its very easy then?

Here are a few sites that may help you:
Geek to Live: How to format your hard drive and install Windows XP from scratch - Lifehacker

http://www.winsupersite.com/showcase...p_sg_clean.asp

Just put in the CD, it should boot from it (and if it doesn't you need to change your boot sequence) and then load up a command line looking screen. Let it load, then select to delete the current partition, and the install in the free space (or set up different partitions and pick one). Then wait for it to do its thing, and it'll restart. Then there will be a wait for it to install and copy things, and there should be some boxes asking you to fill out network information and time. Then it'll restart and go through a set up kind of thing, and then you'll be ready to start with your new fresh copy of Windows.