As others have said, the difference is minimal between the two processors, you probably won't be able to tell unless your main hobby is comparing QuakeIII frames per seccond with your friends.

As to formating, you may not even need to reformat if you have things you don't want to loose. On the other hand, reformating once a year with windows is a great way to speed things up, so it's highly recomened. Just be warned that you need to reinstall everything once you format your hard drive, and now might be a good time to partition it into system and data sections.

If you've never done it before, hopefully you've got a friend or someone who can give you adivce once you've got everything in pices and it won't boot.

Matthew