Option 1: Insert the system install / restore DVD, sys prefs -> startup disk -> select it -> hit the restart button in the window. (Or use any other method to boot off it). Follow the prompts until you get an option button inside the dialog (one or two windows in). When you click it, you'll get the option to erase the disk first and then re-install OS X. Simplest if you don't need to repartition.
Option 2: If you need to repartition, after you boot off the disc, instead of following the prompts, launch Disk Utility from the menus and use the partition tab to create and format the partitions you want. It's pretty self-explanatory.
Option 3: If for some reason neither is an option, you can bring the drive inside the Mac up in target disk mode from another Mac....