You should have the system restore disks, those will allow you to go back to new condition. That is your best bet, but you will lose everything on it.
Beware of people who don't know a lot about computers but say that they do, they'll end up screwing you up in the end.
If the computer claims to have 480 megs of ram then you probably have 512 and you have 32 of it going toward your video card, since many new computers don't have their own video memory, they simply share system memory. Laptops tend to do this more then desktops but some desktops, especially lower end ones, do the same thing.
If you plan on doing this make sure that you have installation disk for everything you want first, the operating system, office or work processing suite, and virus protection. It's also a good idea to download the drivers for all your hardware and burn them to a cd, then you'll have them in case something doesn't install correctly.
I think my laptop came with instructions on how to restore it if I wanted to.
The thing that gets most people is that they'll forget to save their network settings. That's the #1 issue that I've seen. People will have everything but forget to write down their network settings and then they can never get the thing back on the internet. The #2 is that people forget that they have installed software or hardware and then the system restore either doesn't bring back all the software they expected or it won't work properly because they have additional hardware.