Best way to completely reformat old machine for resell?

I've upgraded to a MacPro tower (2.66 GHz) from my circa-1999 Mac Power PC G4 tower and I'm wondering what is the best approach for completely erasing the old machine's hard discs (yes, I installed a second disc!) and reformatting them to Mac OS 10.4.8 for resell to another user.
I have the original discs from Mac OS Tiger (10.4.3) in the box, but I know there were a few revisions up to 10.4.8. The machine currently has 10.4.8 on it, but I want to completely re-format the drives and re-install a bootable copy of the most recent version on it for whomever I sell the machine to, whether it be a co-worker, someone on eBay or other.
What's the most pragmatic approach to doing this? Should I just re-load OS 10.4.3 on the machine and let the future owner deal with the updates, or is there a way I can do a fresh install of 10.8 so that they're ready to go "out of the box" once the prompts come up?
Thanks.

Király summed up the legalities perfectly for you so i'll skip that part. Assuming you're including everything Király mentioned then I would suggest doing the following:
1. Boot to the Tiger Install disk and run Disk Utility from under the Utilities menu.
2. Zero out the data for some protection against someone else recovering your data off the hard drive. If you're mildly paranoid then choose the 7-pass. If you think the FBI is after data on your hard drive, then use 35-pass.
3. Install Tiger OS X 10.4.3 normally.
4. Run through the Setup Assistant and create an account called "temp" and make the password "temp". Use obviously false personal information when required. I like to use Santa's address at the North Pole.
5. Connect it to the internet and install the 10.4.8 combo update. Feel free to install all the updates if you like.
You can sell it just like this and tell the new owner they can create a new User account and delete the temp account, or you can boot to Single-User Mode and type rm -rf /Users/temp followed by the Return key. This will remove the temp user folder. If you do this, then you'll want to do the following to re-activate Setup Assistant:
While you're still in Single-User Mode type these and press Return after every line.
1. mount -uw /
2. cd /private/var/db/netinfo
3. mv local.nidb local.old
4. rm ../.AppleSetupDone
After pressing Return at the end of the last line, shut down the computer and when the next owner turns it on the Setup Assistant will start, just like they brought it home from the store.
Remember, if an answer helped you, post back and let us know.

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