The first is what I call a "soft" format, which basically instructs the drive that all data on it is no longer "good" and can be overwritten. The other is a hard format, usually only possible from a bios level, and "disappears" all the data. I'm not tech enough to know exactly how. At this point the drive is so naked it's lost not only its data, but its partition. You have to create a new partition to use it.

Most of the time, I use separate physical drives for separate logical drives (My "C," "D," and "E" drives are three different 500 GB hard drives). So I instruct the partition program to create the largest possible partition in a 500 GB drive (it ends up being 465 on my machine for some reason). "C" is always applications. "D" is always data. I'm using "E" for leftover heavy storage.

On my laptop, there's only one drive, so I partitioned it into a "C" and "D" drive. There are programs (I use Partition Magic) that actually let you screw with partitions after the fact. I've shoved the border around on my laptop with it.