Assuming you can still boot to the original install, I would suggest you look a little deeper into some things you could clean up. If you haven't already I would perform the following steps to clean up some space.
1. Package cleanup
from the terminal type the following:
sudo apt-get clean
sudo apt-get autoclean
sudo apt-get autoremove
2. empty the trash. I know it sounds silly, but you would be surprised how much space it takes up if you forget.
-Empty the trash.
3. Go back through and double check for some programs that can be removed. Perhaps you have some old kernels that could be removed.
Remember you directly upgrade from 10.04 to 10.10 and the installation takes between 3-4 Gb hard drive space, and 8 - 10 Gb will be needed to run comfortably.
You can perform the upgrade like this:
1.Open the Software Sources application from the System -> Administration menu
2.Select the sub menu Updates from the Software Sources application and Change the Release Upgrade drop down to "Normal Releases" and close the application
3.Press Alt-F2 and type update-manager
4Click the Check button to check for new updates.
6.If there are any updates to install, use the Install Updates button to install them, and press Check again after that is complete.
7.A message will appear informing you of the availability of the new release.
9.Follow the on-screen instruction
I know your original question was about formatting your drive via a live cd, but I just wanted to give some options before formatting. So to answer your original question; the best way to wipte a drive on a live cd is by using a tool called wipe. you can use the following procedure to wipte your drive:
wipe is part of the Universe repository, which is not enabled by default. you need to enable it by clicking on Settings > Repositories in the Synaptic Package Manager window.
Check the checkbox next to “Community-maintained Open Source software (universe)”. Click Close.
You’ll need to reload Synaptic’s ( if that's what you are using ) package list. Click -- >>Click reviews on the Reload button in the main Synaptic Package Manager window.
Wait until it reads “Quick search,” and then type “wipe” into the search field.
Click on the checkbox to the left of the label “wipe” and select “Mark for Installation”.
Click on the Apply button to start the installation process. Click the Apply button on the Summary window that pops up.
Once the installation is done, click the Close button and close the Synaptic Package Manager window.
Open a terminal window
You need to figure our the correct hard drive to wipe.
In the terminal window, type in:
sudo fdisk -l
A list of your hard drives will show up. A few factors will help you identify the right hard drive. One is the file system, found in the System column of the list. The other is the size of the hard drive.
To start the wiping process, type the following into the terminal:
sudo wipe /dev/"yourdrive"
Your hard drive will be completely wiped. It may take some time to complete, depending on the size of the drive you’re wiping.
hope this helps