Computer forensics: Sanitizing old computers

In an age when government agencies and private companies are striving to keep up with current technology, old computers are being sold or recycled to recoup some of the cost associated with upgrading. Does your office "clean" the hard drives before the systems are recycled? How effective is the process they use? 

How clean is clean?
Computers can store vast amounts of data. Hard drives are constantly increasing in size and speed. With technology changing almost daily, computers purchased more than two years ago are approaching "door stop" status. Companies and government agencies, which struggle to replace outdated equipment, are faced with the decision of how to remove the data on outgoing machines. Some entities have opted to needlessly destroy drives altogether rather than spend the time to properly sanitize them. What does your organization do? Are they re-formatting the drives, using a wiping program, destroying the hard drives, or simply denying the threat and choosing to do nothing?

Simply reformatting or even repartitioning the drives and sending them out the door isn't much more effective than doing nothing. Fraudsters can use common commercial programs to recover reformatted and even repartitioned hard drives. So what does the formatting process actually do?