Does anyone know how to reset to factory settings?

I bought my mac used and was told by the seller to take my mac to apple to have them restore it. I bought snow leopard but my mac will not install it. I am thinking that if I go back to factory settings everything will work again on here. Does anyone have any suggestions?

Welcome to Apple Support Communities
Call Apple to get replacement DVDs > http://support.apple.com/kb/HE57
Then, follow these steps:
1. Insert the Mac OS X disc and hold the C key while your computer is starting.
2. Select the language, go to Utilities menu > Disk Utility, choose your hard disk at the top of the sidebar, go to Erase tab and erase the drive.
3. Close Disk Utility and reinstall Mac OS X.
After doing that, open  > Software Update, and install the most recent version. Finally, you should be able to upgrade to Snow Leopard, only if you are using 10.4 or 10.5. To check the Mac OS X version, open  > About this Mac

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