Jim, here are my suggestions FWIW. Use the secure erase option on your disk utility, I think the 7-pass option will be fine unless you're selling it to the CIA. To be sure, physical destruction is the only method of which I'm aware to insure that your data can't be recovered, but that's for extreme recovery operations that aren't readily available to normal users. If you want to be absolutely safe, simply replace your internal HD (it's not difficult) with a new one which you can probably pick up for ~70 bucks or less and install a fresh OS.
As far as installing a new OS, you can simply install it and decline to begin the "new user" setup procedure that is offered on restarting after installation. Your buyer will be offered those options the first time he/she/it starts it up (or they can be accesses through the drop-down menu) and they can configure it according to their own specific needs. If you only are using a single partition on your boot disc, format it "journaled" for a variety of reasons, none harmful to your new user. Some Mac systems have problems with multiple "journaled" partitions on the same disc, for reasons that I can't recall as I'm writing this.
Of course, YMMV. Good luck. Cordially,