How do I reset/reformat my powerbook?

Pop in the install disks that came with your PB and select and erase and install.

 

will that safely erase all of the data on the computer so that no shady character could purchase the cpu and then reaccess all of the old info?

 

To completely (or as completely as possible) erase data, you will want to select a secure erase method. After booting from the startup disk, go to disk utility and select erase. Select erase options, and choose either the 7-pass or 35-pass options.
http://www.oreillynet.com/onlamp/blog/2005/05/enhancing_security_and_privacy.html

 

EDIT: This post was wrong.. very wrong. Removed.