what is the difference between a quick format, standard format and low level format? what does the master cd's and recovery disk give you on a Packard Bell for Windows98se?

Quick just removes the entries without testing/confirming integrety of the disk.
Standard removes all files/entries and tests integrety of the disk
Low Level Format is also known these days as partitioning (LLF was originially done with MFM and RLL drives since you had to map out for the OS the bad sectors)

Most recorvery Disks or the Actually XP CD will give you the option of Re-Partition, Quick Format or Standard Format.

To give the disk a "Factory State" you would need to remove and recreate the Partition and then do a standard Format before installing the OS and APPs.

so, the master cds/recovery disk picking the smart system restore option will give me the standard restore? not the low level format or the quick one?

Yes