What does "full format operation" do to a disk?

Info for Windows Vista (and I presume 7) Apparently a "full format" in later Windows versions does indeed overwrite each sector.

A quick format just deletes the allocation table and leaves the files in place.

On the other hand the full format DOES NOT go through the whole partition and erase data ON PRE-VISTA VERSIONS OF WINDOWS. What it does is basically scandisk and quick format. This way if there are any errors on the disk itself, they will be found and bad blocks will be marked as such and possibly replaced by spare blocks by the HDD. This way we can be sure that the formatted partition is physically in good condition and may be used.

Here's a source form Microsoft that backs that claim.