First, I commend you for donating this computer! A lot of places can use donations like this.
Secondly, it is a good idea to remove personal stuff, even if you are reasonably sure there is nothing important. I buy my computers second hand, and I'm surprised by how many people don't delete any files before donating to the thrift store. I have powered up computers to test and actually seen Quicken files left behind!
The only way to completely delete data is destroy the hard drive. The second best--and acceptable for most uses--is software that will do a complete delete. This should "overwrite" random data. While the old data might be still be recoverable, it would take a lot to get it back. More passes should make it about as good as destroying the hard drive.
My approach would be to completely zap the drive with some complete delete software, then reinstall Windows. Additional benefit: you make absolutely sure that the only software that will be there is stuff that can be licensed to go with the computer. (Not that this bothers some people. I am frankly shocked at how many computers I see on Craigslist that have installed everything Adobe makes. But don't include disks or any license material, making that software "hot.")
Once I had to zap an XP machine, but didn't have a CD to reinstall XP. I deleted everything through the OS. Then used a program that could overwrite "free" space. Then, to be as sure as possible, created a new user account, deleted the original account, and did another pass with the complete delete. I felt reasonably confident, although the data I was zapping wouldn't have directly harmed me had it been recovered.
I think the complete delete program I used was Eraser. I don't know how good it is--but it was what I could get fast when I needed it. Link to Eraser web site:
eraser.heidi.ie