I assume that the reset is the same on the Note 1 as it is on the Note 2?
Only if it has the physical home button on it (N7000 version). Basically a slightly shorter and wider version of the Note 2 in appearance. If you have the US/NA release (which has no physical home button, but 4 capacitive buttons), you need to follow a different procedure to get to the Android Recovery Console.
I recently upgraded from 4.0.4 to 4.1.2 but, can't remember what the OS was when I bought it a year ago. Which OS will it revert to?
The Note came originally with Gingerbread 2.x. The first major update was to ICS and now JB. If you successfully flashed JB into your Note, that is the OS firmware version (4.1.2) it will revert to after a hard reset back to factory defaults. You cannot revert back to ICS or GB after a successful ROM update.
Do I then just go straight to installing 4.1.2 via Kies or OTA? If so, what is the reason for the second hard reset suggested above after the installation of 4.1.2? Does this not reset it back to whatever OS it was originally?
Unfortunately, if you already flashed 4.1.2 successfully into the device, you cannot revert back to a previous build using normal methods. KIES will not work in this fashion.
Also, as I want to do a completely clean install I want to reformat my SD card. I have taken a copy of it just in case I need anything. Will it be OK to have a blank SD card and at what point should I reformat it?
Doesn't matter. You can reformat the card with the phone before or after the hard reset. You can also reformat the card on your computer.
As I mentioned earlier, the US/NA variant of the Note uses a different method to get into the Android Recovery Console. Since it doesn't have a physical home button, you need to press the following buttons all together at the same time - Power, Volume up and down. Then follow the rest of the steps.
You can perform a hard reset back to factory defaults and see if that resolves anything. If it doesn't and you want to revert back to an earlier build, you will need to visit XDA. You will need ODIN and the original stock ROM specific to your Note. You cannot use KIES for this.