Generally, any modern Linux distro allows to format HDD and install the same during installation. U can use SuSE / Red hat for this purpose. Other Linux flavors also do the same. If the HDD has probs, then go for Knoppix / System Rescue Cd (SysResCD) for the same purpose.

The procedure is basically routine if the existing hard drive is okay; if not, replace it with a new blank hard disk. Here's my procedure for installing Linux Mint 11:
First you'll need another computer with a CD-RW that can burn a CD-R and connect to the Internet.
Next visit: http://www.linuxmint.com/edition.php?id=87 and download Linux Mint 11 to that computer. (about 700MB)
Next burn the disk as an iso disk. (name at the end of the burn must contain one file with extension .iso (may take a few tries) When done, remove the CD-R.
Next connect up an external USB CD-RW to the netbook if it doesn't have a CD player and insert the CD-R you made. (Office stores sell them for about $30 USD)
Restart the computer with the CD-R in the drive and choose F12 or similar to cause a boot choice menu. Pick the CD-RW player with the arrow keys and select it.
Boot from the CD-R and install Linux Mint. With a bit of luck all will go well and your computer is usable again. Be sure to get the updates.
Best regards, Dave (dm@madmod.com)