Previously with Android 2.0 or less, to restore Nexus One, one had to go through a recovery process which was time taking and frustratingly technical. But with Android 2.1 which is the latest OS running on Nexus One, restoring it to factory settings has become very easy.
To reset Nexus One to factory defaults, just go to Settings --> Privacy --> Factory Data Reset.
A warning will be given about what this option will do. Let's go through the warning as a whole:
This will erase al...