I'm selling my laptop on ebay. what should i do (delete) in order to protect my privacy. i'm worried that a hacker or pedofile will buy it and criminal activities will be traced back to me.

The Operating System, usually Microsoft Windows, is licensed to you. So theoretically a new user of the machine will have to buy their own version.
With this in mind the easiest way to give yourself peace of mind is to remove the hard drive and replace it with a new one. Obviously you will have transfered the data to your new machine first.
You can chose to put in a new hard drive of the same capacity or a greater capacity (to make it more saleable) or even ask the prospective buyer.
Alternatively, download this free utility called 'Eraser' from:

http://www.eraser.heidi/eraser

This can be configured to overwrite (erase) the contents of the hard disk. But remember that the O.S. is still licenced to you.
If you want to subsequently destroy your old hard disk the most reliable tools are an electric drill, HSS bits, and a hefty hammer to break up the platter of the drive.

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