Go to How To Set Up ADB/USB Drivers for Android Devices | TheUnlockr
and install the SDK as instructed. Once installed you can plug in your galaxy i5500 to your computer. Make sure it's in USB mode by pressing the volume down + the big middle button + the power button. You should see an android bot digging in a yellow triangle. Once everything is good go to command prompt (dos terminal) and type: adb reboot recovery and that should reboot your device into recovery mode. Once you see the triangle with the exclamation mark just press the menu button to begin factory reset.
GREAT METHOD FOR THOSE WHO CAN'T HARD RESET BY PRESSING VOLUME UP + POWER BUTTON!