Pop the factory OS X disc in, run disc utility, format the drive (I'd do the multi-pass method, I'm paranoid like that), and re-install the OS fresh, so the new owner gets the factory Welcome screen.
After you transfer/back up your data, etc, you will probably want to reformat the drive on your old Mac and reinstall the OS that came with it from the Restore DVDs
You can do a security pass on the drive from Disk Utility