Question about hard-reset

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Hello,

I was wondering: What exactly happens to the Wizard when you perform a reset?

Are all the files on the Wizard deleted except for the operating system?
or
Are all the files on the Wizard deleted except for the operating system and the Extended_Rom folder?
or
Are all the files on the Wizard restored to their original state from some sort of image? So you lose all information but if you previously deleted a file in the Extended_Rom folder it comes back after a hard reset?

Also, what happens when the battery drains? Do you also lose your files as you did with the Magician, or are all your files still on the device? (persistant storage).

all files in the "user storage" area of the rom are deleted (formated)
this in essance forces WM2005 to start afresh.

this user storage area is in the same memory as the operating system so isnt affected by anything, only hard reset (format user storage area).