I am trying to clean my hard drive, in order to reinstall windows xp. I am going into the dos prmt area and entering "format c:" However instead of getting a "are you sure" message, the computer is telling me....

"The type of file system is FAT32
Enter current volume label for drive c:"

Can anyone tell me what I am doing wronge?

It wants the name of the hard drive. Whatever your HD is labeled in My Computer is the "Name of the volume". Hope this helps. If you are reinstalling because of virus you should wipe you drive before you format. Virus/ malware can remain after a simple format.

It can? How is this possible?

Formatting does not destroy files. It only re-aranges you files so that your operating System can write oover them without problems. When you wipe a drive the wipe program actually writes random data over the files destroying them in the process.
That is why iscertian cases with the proper software you can recover formated information.
The easiest program to download and use is Active@killdisk. I prefer Digtal Dolly (Hard drive utility)[/url], because of all of the utilities it comes with but either will do the job.