FAT is just a table of contents. Deleting it doesn't delete the data itself, it just deletes references to it, right? I think malberttoo makes a valid point that if the factory reset just re partitions or deletes the FAT, the data is still there to be potentially mined with forensic recovery software.
Having said that, I'm just playing devil's advocate. For a normal home user, I see nothing wrong with using the factory reset option -- MS, or the next owner is unlikely to care about what you had on your hard drive.
However, as someone who supports laptops, desktops, and servers for an enterprise level company, we use a certified data erasure utility on every hard drive and retain an electronic record of the event for security purposes. Obviously, the level of concern here should be based on the nature/importance of the data itself.