Here is how to wipe and install your OS using Loader.exe. I did this yesterday and found it to be a little easier and quicker. This is how RIM will have you wipe and reload if you call them for support.
1.Go to apploader:
c:Program files/common files/research in motion / apploader
2. Right click Loader (grey cell phone icon) and select "create shortcut"
3. Right click the shortcut to Loader (you just created) and click "Properties"
4. In the "Target:" box the text should be highlighted. Click in this box until nothing is highlighted. Then press the "End" key or move the cursor to the end of the text by pressing the right arrow key.
5. Type the following directly after the ": (space)/nojvm
<It should look like this>
Where it says "WIPE" it should say "Shortcut to Loader" - I renamed it on my PC...
MAKE SURE YOU HAVE EVERYTHING BACKED-UP THAT YOU WANT TO KEEP i.e. Contacts, ect...
If your OS/Hybrid is already installed to the PC then all you have to do now is plug in your phone and click your shortcut to start the wipe/reload of your phone. If you want to shrink then do that first, then follow these steps.
I used this method last night to wipe/reload V8 to my phone and it worked like a charm.
I highly recommend anytime you wipe / reload - when you restore do an advanced restore and only take your contacts, calander, tasks, memos, and profile options. Everything else is not needed.