How-To Geek

Hey. I just brought myself a new macbook of a friend(one of the aluminium ones) and decided the best way to get rid of her files was to reinstall the OS X software. Just after i started this i thought i had better check what i was doing having not used a mac before so stopped it. Then it asked if i wanted to restart it or something and gave me an option of with what software or where it was or something i had 2 choices, cd rom, harddrive of search i think and i picked hard drive. now all i get is a white screen with a grey apple in the middle and the loadinf windy circle thing underneath it. i have tried turining it on and off and putting the software cd in it again but nothing is happening. WHat do i do?!