1) I don't believe this is strictly true. Data on a hard drive is stored as a series of 1 and 0 digits, just like everything else a computer works with. Deleting a file from your hard drive doesn't actually erase the data, it simply removes the links telling your operating system where to find it. It's effectively gone, and will be overwritten, but the right equipment and software can recover it. There are some programs out there that manually overwrite deleted sections with all zeroes. It sounds to me like you aren't worried about getting the contents back, you're just worried about someone else reading/making use of your data after you've turned the laptop in. Try one of these programs; I'm pretty sure they'll work.

2) Personally, I dislike Dell. I dislike Gateway too, and Compaq, and HP, and pretty much every package system. I have nothing against them, as such, I just prefer to build my own. However, if you do decide to go with Dell, I definitely recommend going with a better video card than that one. Since it sounds like you're planning on doing a lot of media creation/editing/encoding, I recommend going with something based around the Prescott processor. The Athlon 64s will do better in games, but the Prescotts do much better with media work. Also, the X300 is PCI-Express, not a problem if you're buying a new computer, but if you go PCI-E, I recommend nothing less than an X800 vanilla or a 6600GT for a video card.