i did a quick format on my 80 gb hd and i did a complete install of windows and now when it restarts it asks me which OS i want to load up (both win xp home).
Because you chose to format the installation partition instead of deleting it, recreating it and then formatting it. The partition table and the MBR still have data from the old installation that the new installation picked up on, hence you have two OSes listed in your boot.ini file - that's what lists the available OSes on that menu.
There is a thread here at the HardForum where I explained in detail about how to modify the boot.ini file within Windows so you don't have that other OS listed anymore. You can find that particular posting HERE.