How to reformat my mac with the latest operating system?

Hi,

Im looking to reformat my Macbook as it is starting to get very full and running very slow. I have backed up all of my data and I am ready to reformat, however i am a little stuck on where to start. I have never reformat a Mac before and would like some advice. The Macbook I am reformatting is a 13-inch Macbook Mid 2010 and currently is running OS X Mountain Lion 10.8. When i first purchased the Macbook it had an older version of OS X (im unsure what version exactly) and since then i have paid for the upgrade in opperating system.

My question is. Is there any way to reformat using the most current OS that is currently on my Mac if i do not have the CD (as i downloaded the OS)?

Or would I have to use the CD that came wit this Mac and then upgrade to the latest version? Also if i have to do it this way will i be charged again for downloading the most recent version of OS.

Thanks in advance.

Glen R