I’ve always used the excellent Free Software called DBAN to erase old hard drives before either giving them away or recycling them. DBAN complies with the government regulations that are designed to prevent data recovery, without destroying the hardware itself. GNU Shred can do the same on the file level, if you want “secure erase file” functionality.
The general belief is that bits can be recovered from the drive, in theory, even after being overwritten with zeros, because of some remaining magnetic forces or something like that. So if a foreign govt is after your data, better safe than sorry and melt that thing down.
In practice, though, the established data recovery companies probably have more advanced technology than the govt. And I’ve used DriveSavers and the like to recover data off dead HDs. I think once it was fried electronics, and another time a bad motor or something. At $2k per disk, it was not cheap, but they got the data back. Of course, in both cases, it was hardware failure that prevented me from reading the drives, and not any deliberate erasure of the data.
So I was surprised to learn that there isn’t a data recovery company that can get your data back if you go and overwrite it with some zeros. Here’s an active challenge: http://16systems.com/zero/
So I guess this means I no longer need to make a DBAN CD when erasing disks, but any LiveCD at all will do just fine.