Turn on the Xbox 360
Press the Guide button on the controller
Go to Settings
Select System Settings
Select Console Settings
Select System Info
Note the console serial number if needed
Go back to System Settings
Select Storage
Highlight Hard Drive or the storage device you want to reset
Press Y
Select Format
Confirm the format
Enter the serial number when prompted
Wait for the format to complete
Return to the Xbox Dashboard
Go to Settings
Select System
Select Console Settings
Select Language and Locale
Select Restore Factory Defaults if available
Confirm the reset
Restart the console
Sign in and set up the Xbox 360 again