Have you ever wanted to completely reset a Mac?
I am doing this today in order to refurbish my 2006 Macbook Pro to factory settings, and I found these instructions very useful. The entire process took me 2.5 hours. I can't say if that's because my computer was full of junk, or if that is the normal speed, but the longest part was zeroing out my hard drive.
Here's the link: http://www.brighthub.com/computing/mac-platform/articles/48174.aspx (http://www.brighthub.com/computing/mac-platform/articles/48174.aspx)
Notes: You need an OS disk, and if you want to re-install iLife you will need that too.
this is the same way i did my windows 7 installation. I reformatted like your instructions but instead of installing mac i booted to my windows cd :)