Don't know the windows logon password

Hello, HELP!!!
My father gave my daughter his hp compaq nc4000 just after he had a stroke, it has windows xp but the only account is password protected, I tried to log into windows using the administrator account but for some stupid reason it is also password protected. I want to know if restoring the computer to factory defaults would fix this problem, and if so how i can do it. Or if anyone has any other suggestions i would really appreciate it.