System Restore?

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Your Mac's Specs
Black Macbook C2D 2GHz 3GB RAM 250GB HD iPhone 4 iPad 3G
Pop in the restore discs that came with your Mac, restart, hold "C" and run through the setup (option should be called format & install)
 
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hi, new mac user here

Does this system restore HAVE to format? Or can it just re-install the OS?

Or am I getting this completely wrong. In Windows its useful to restore the OS, because well, its windows. Does the same apply for Macs?
 

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