This article, taken from the Mac OS Info Center on your hard drive, describes the clean installation procedure for Mac OS 8.5, 8.5.1, and 8.6

Performing a clean installation creates a new System folder on your hard disk. The old System folder is renamed Previous System Folder. You may want to perform a clean installation if you are having persistent difficulties with your computer that a normal reinstallation does not solve.

IMPORTANT: Because your computer has a new System Folder, after a clean installation you must reinstall third-party fonts, extensions, and control panels that you have added to your system or that came with programs you have installed.

The steps below assume that you are accepting the default choices for installing system software. You may customize what gets installed by manually selecting the various system software components after clicking the Customize button.

To perform a clean installation:

1. Start up your computer from the system software CD.
2. Open the Mac OS Installer application.
3. In the Welcome dialog box, click Continue.
4. In the Select Destination dialog box, click the Options button.
5. Select the Perform Clean Installation option, then click OK.
6. Select the destination hard disk, then click the Select button.
7. Click Start to begin installation.