User Accounts & Home Folder relevance to New Mac/Migration?

[Mac Skeleton]

Hey guys,

So I am about to transfer all my data/apps/etc from my 2008 MBP 15" to my new 2011 MacBook Pro 17" and once I do, I need to ship the MBP out to my buddy that bought it from me. So there's really no going back after the transfer.

I am rather confused at a few things and have tried searching and read tons of different answers that don't quite get at what I want to know:

1. What exactly does the User Account and Home Folder contain? I mean if I just drag and drop my files (docs/pics/music/apps), what exactly does the Home folder do?

2. I have a few slight issues with my OS X now, apps quitting etc. I would love to do a fresh install, does migration assistant do this?

3. How should I go about getting the cleanest and freshest install this without losing all my data. (I have lots of Safari Bookmarks, firewall settings, and quite a few apps, but not a crazy amount, etc)???

ANY input would help. I also don't get the difference between Set Up Assistant and Migration Assistant if there is one.

Thanks in advance.

 

[satcomer]

Just use the latest version of OS X and do a fresh install but just at the Disk Utility part erase the internal drive 2 or three times, before continuing the install. This way you weill erase any personal data on that Mac Book before you sell it. This way you can make a user name like Test with the same password and just let the buyer know the test user account to create their own account.