Bought Used iMac - How to Erase Old Info and Install New?

I recently bought an 18-month-old 24" iMac from a friend to replace my Mac Mini. He didn't erase anything off it, just unplugged it and handed it over.

I'm sure this is real basic, but how do I erase all his information and install myself as administrator?

The machine originally came with Leopard and he upgraded to Snow Leopard when it came out (he's given me all the original disks).

I have all my documents and files backed up on an external hard drive (via Time Machine). Once the iMac is ready to go, is it simply a matter of plugging in the external HD and transferring files, or is there a better way?

Thank you!
- Bob

Did he also give you the Snow Leopard DVD? If not, you can purchase it from Best Buy or an Apple store for $29.00. (upgrade version) The best way to clean the machine is boot with the original install media and erase the hard drive and then reinstall OS X. That will give you a fresh start.