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I want to leave the software on my mac and the profile and all that but I want to erase all passwords and history and personal settings from the mac so that a new colleague can use it?

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Simply create a new user account in System Preferences -> Accounts. The new user won't have access to any of your personal data from your account.

If you're sure you won't be using that computer any more and you have a copy of all your data that's important to you, you can delete your own account from the new account afterwards.

EDIT:

I think this is overkill for most cases because creating a separate account will already protect against casual snooping. But if you're really worried about the colleague trying to access your files, the best option is to do a multiple-pass, low-level format of the hard drive (Disk Utility can do this when booting from the OS X install disc), then reinstall a clean copy of OS X. That will take about 30 extra minutes of your time and provide complete peace of mind.

Protecting your account with FileVault would provide good security, but if you're never going to use the system again, you should really get your data off the machine.

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    Unless you have your user account protected with FileVault using a file recovery utility will allow somebody to "undelete" your files.
    – Ɱark Ƭ
    Commented May 9, 2011 at 17:10
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The safest way to do that is to encrypt your account with File Vault and then create a new account for the new user. Then it doesn't matter if he has admin access he can't ever access your files without your password.

Even erasing the account doesn't really get rid of the files. They could be recovered with a file recovery program. File Vault is the easiest way to keep things private.

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This answer on how to restore a mac to a factory fresh appearance will do the trick for you. Secure erasing your old user folder or using Disk Utility to wipe all the free space would be a good precaution if you want to be sure the data is overwritten (barring an SSD being installed).

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