Reset to factory setting question


Android Enthusiast
Now that I have and love my new Nexus it's time to sell or pass on my Droid Incredible but what do I need to do to clear all my settings? Will a reset to factory remove all that I have done over the years and give the new owner a phone that looks as if they are starting from scratch?

Does anyone know how this is done? I just want to make sure I don't remove anything that is vital to the phone's operation but I also want to make sure my private information is cleared out.

Also, anyone know what I should ask for a Droid Inc that is in perfect condition (I've had a screen protector and case on the phone since day one)?