I frequently see working computers offered and taken on Freecycle. I have more-or-less followed the microsoft solutions in David's post by doing the following:
1. Delete everything I can think of - documents, mail, preferences, anything other than the basic OS and applications. On the Mac there's a Secure Empty Trash option that overwrites the space being taken up by what's being deleted.
2. Use the original system disks to do a "clean install" - that'll reformat (wipe) the hard drive and just put the original stuff back on.
3. If I no longer had the system disks, or even if I did but if I feel like it, create a junk file in Word - blah blah blah hello hello hello or whatever - select all, copy, paste over and over till it's huge. Save and quit. Select and copy the file - over and over, till the hard drive is full. Then throw it all away and empty the trash or secure empty trash.
4. Repeat with another junky gibberish file. If I feel like it, repeat again a few times.