STEPS
TOOLS
Very important. First make sure you back up your iPhone. Sync your iPhone. In iTunes right click on your iPhone icon and select backup. I will cover a more thorough backup in a later guide.
Locate and tap on the settings icon
Tap on General
Scroll to the very bottom and tap on Reset
Tap on Erase all content and settings
Tap on Erase iPhone. Your iPhone will now restore itself and when done you will have a fresh install just like it was when you first got it.
1.0 iPhone 
1.0 Finger

How to erase your iphone

There are times when you'll want to delete your iPhone data and settings. This includes when you are selling or giving your phone away, sent off for repairs, or just want to start fresh.