Hey, the Performa can more now than a 486 could do 5 years ago. Remember, Apple builds their computers to last, not to become obsolete when a new architecture or OS is released.
While it's true you won't get a "true Mac experience" from using a Performa (you can't run the latest games or powerful applications), you can still go online, use a word processor, and other basic stuff like that. Look through what is on the computer and see if there's anything you want to keep. (My dad bought me a used iMac from a friend of his, and I didn't delete anything off it except the old account. I kept all the programs that were on it, including Virtual PC 3.) Reformatting a drive is for extreme measures only, and you shouldn't do it unless there's actually something wrong with your computer. If all you want to do is get rid of old data, all you need to do is drag it to and empty the Trash.
Stick with the system you have, delete whatever you don't need and keep what you like, and come back to us when you run into a problem. We'll be here for you.