Just by delete. Restoring will format it, though. I figure this feature's mainly a test feature; if you just want to format it, I'd hook it up via USB and do it that way... or use the console.
You mean you leave it *off* at night? Um... may I ask why? If you just set it to airplane mode, it uses a neglegable amount of power(literally, the voltage goes *up* slightly over those off hours), and then it's on and ready in the morning.