Is it possible to format a hard drive with dos and still have a virus on it?

Somebody told me that when you format a drive it doesn't erase everything. It leaves something called a boot sector and a virus could be embedded in that file.

Is this true, and if it is how can you actually erase everything on a hard drive?

My daughter has a virus called project 1. She reformatted the hard drive with a win 98 start disk, then installed win 98 and then upgraded to win xp.

She claims the virus is still on the computer, she has not connected it to the internet yet.

Thanks.