I am selling a computer that had XP on it (came with computer) but I don't want to give away XP.

How do I format the drive and remove XP in the process?

Why do you want to get rid of XP? If it is an OEM copy of windows chances are it wont work on another machine, and you should get a copy of windows with the new one, unless you built it yourself.

The new computer came with vista - I have set this up with a dual boot and the xp disk - it installed fine.

Well depending on the spec of the machine you are selling, the only people who would be interested in it with no OS are people with a non OEM copy of an OS.

However, The quickest way to clean format the hard disk would be to put it in your new rig as a slave hard drive and format it like you would format a floppy (My Computer, right click drive, click Format...) Or you could put in your XP cd and boot from disk and delete the partion and format the drive, then just re boot the computer without installing the OS.

Or you could look here and see what microsoft have to say