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This doesn't apply in your case, since you're giving your Mac (it's an iMac G4, by the way) to someone trustworthy, and don't want to wipe it. But if someone were selling their old Mac on eBay, they'd want to totally clean it off, and set it up to duplicate that "new Mac" experience for the buyer. Here's how to do it with Leopard. Pre-Leopard it's a bit different: if anyone is interested, I'll provide Tiger notes.
Warning: don't do any of this unless you want to lose all your files!
Firstly, you should reformat the disk to ensure that a nasty buyer couldn't snoop around and retrieve some of your data (just deleting files isn't good enough). So, insert the Leopard install media, double-click on 'install Mac OS X', and let the system restart. When it comes to the 'select destination' page, select the system disk, click 'options', and select 'erase and install'. This will ensure the disk is cleaned. Continue the installation as normal.
Eventually, you come to the final setup, where you enter your details and create an account. Go through this as normal - but, for safety, don't enter any personal details you don't want the buyer seeing (you'll be deleting these details again in a moment, but the buyer could still conceivably ferret them out of the disk). For the same reason, use a throwaway password.
Now you want to take the system back to the point before the Setup Assistant runs (that the program which you've just interacted with to enter your details, bring up the network etc):
Restart the system. Hold down command-S until the text screen appears. The system is now in 'single-user' mode, and you have a command line. Assuming the short name of the user you created is 'fred', type the following:
fsck -fy mount -uw / launchctl load /System/Library/LaunchDaemons/com.apple.DirectoryServices.plist & dscl . -delete /Users/fred dscl . -delete /Groups/admin GroupMembership fred rm -fr /Library/Preferences rm -fr /Users/fred rm /var/db/.AppleSetupDone halt
The system should shut down and power off, and you're done! Pack it up and ship it off. When the buyer powers on, they'll be taken through the Setup Assistant, just like if they had bought the Mac new.
As for passing on applications to your mother, check that the licence conditions allow it. For example, as far as I remember, Adobe's Photoshop licence allows you to install two copies (one desktop and one laptop), but only for your own use and only if they're never used simultaneously. So if you want Photoshop on the old Mac for your own use, you're at least sticking to the spirit of the licence - but not if she uses Photoshop too.
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