How do I prepare my Mac to sell it?

It all depends on how securely you want to delete your documents. Is this computer one you’ve used for sensitive business-related stuff? Does your company need you to wipe it securely so no documents fall into the wrong hands? If so, then I would suggest searching Google for a secure file deletion tool. Unfortunately, the one I used to use is no longer supported (iWipe). Use the tool to delete all your sensitive documents first, then use a Mac OS X installation disc to format your machine. Install a fresh copy of Mac OS X on your computer using the same disc. Create a simple user called something like, “User” and sell it that way. I would also suggest you use some mild cleaner (water or 409) to very gently clean the metal surfaces to remove fingerprints, dust, smudges, and dirt. Finally, give the screen a good wipe down with a microfiber cloth (available at places like Office Depot, assuming you live in the USA). When you’ve found a buyer, don’t forget to include everything that came with your computer originally, like the power cord, all installation discs, your Apple remote, etc.

This response is from my husband, a computer engineer and Mac specialist:
1) Find your boot CD and or installer CD/DVD.
2) Reboot or boot to the CD by pressing on the C key so that the Mac will be forced into booting off of the CD
3) The installer will let you choose (from the menus) Disk Utility.
4) Securely erase your hard disk by using a 3 layer or 7 layer wipe.
5) Now re-install the OS by quitting “Disk Utility”
6) Re-install the OS (operating system).
7) Sell the wonderful Mac : )

I second what @GracieT said, no need to go looking here and there, Disk Utility in has what you need. Yeah! Macs!!
and @GracieT :)