why do you need to erase it on the go? He could easily do it when it's plug in, because if he's going to want to use it, he's going to have to plug it in to a computer. unless he wants an expensive paper weight
I believe you can use itunes or Disk Utility to format it. I don't know of any way to erase it on the go. But I do know you can format it because I once turned a PC iPod into a Mac iPod by formating it.
When you reset iPod all your music and files are saved, but some customized settings may be lost. Date and time is preserved (unless the iPod reset itself because it had no power and then was reconnected to power). Other customized settings, such as Bookmarks, On-The-Go Playlists, Shuffle, Backlight timer, and so forth are preserved from the last time the hard drive turned on.