Instructions
Use the wireless PS3 controller to select "Settings" from the XMB home menu.
Choose "System Settings" under "Settings" and press the "X" button on the wireless PS3 controller.
Choose "Format Hard Disk" and press the "X" button.
Select "Yes" when the PS3 system asks "Do You Want to Format the Hard Disk?" and press the "X" button to proceed. The hard drive will be formatted and all data contained on the hard drive will be erased.