Wipe the disk, install Windows (assuming XP) that came with the laptop.
You will need to refer to your laptop manual and/or laptop manufacturer's
instructions on the method for doing this - as it could be anything from
using an actual Windows XP installation CD/key on the sticker of the
laptop - to a recovery partition on the hard disk drive and some keystroke
during restart.
If you are concerned that someone may gain access to the data files,
yes then can with special software.
In which case you should run a special disk wipe software package
(see below) after you format the drive.