1. Power off the phone
2. Press and keep pressed UP and HOME and press Power for about 2-3 seconds, keep pressing when you see green droid.
3. Use Volume key to move to "WIPE DATA / FACTORY RESET"
4. Confirm option with BACK button
5. Scroll down to "Yes --delete all data" and confirm using BACK button
6. After operation press Back button once again to restart phone
Hard Reset will erase all of your data
All described operations you are doing at your own risk.