Currently Being ModeratedFeb 3, 2013 3:55 AM (in response to Robert Sq)
To restore the iMac to factory settings:
1. Press Command, Option and R keys while your Mac is starting to start into OS X Recovery, and open Disk Utility.
2. Select the hard drive at the top of the sidebar, go to Erase tab and erase the disk.
3. Close Disk Utility and reinstall OS X
Currently Being ModeratedFeb 3, 2013 4:01 AM (in response to Robert Sq)
The Command+Option+r key option only works to reinstall Lion or Mt Lion on systems that Came with one of those versions of OS X Preinstalled. Late 2011 models and some "late" "Early" 2011 models and Newer Mac's computers.
If your system is older then that then you will need the original System Discs that came with your system. If you can't find them, God Know Why (but seems to be normal for Mac users to lose or throw away those discs), you can order a new set from Apple at a small fee.