"Factory Settings" means that the hidden BACKUP of Windows will be restored and OVERWRITE everything you've done since buying the laptop.
As mentioned, to initiate the process it's usually one of the FUNCTION "F" keys like F12.
I'm not sure of your situation, but another alternative might be to buy the $40 digital upgrade to Windows 8 Pro:
1) find the Microsoft Windows 8 upgrade site ($40 digital upgrade)
2) follow the instructions to download the IMAGE file (you MUST choose 32-bit if you have 32-bit XP/Vista/7 or 64-bit if you have 64-bit of the same)
3) burn the Windows 8 Pro Upgrade IMAGE to a DVD if possible (highly recommended)
4) start the upgrade procedure following instructions
5) open Device Manager in Windows 8 and look for any issues (exclamation), for example I googled the name I found and it came back the "Media Device" I then installed the Vista 32-bit versions and my SD card reader worked.
- Factory Defaults (F key) wipes out everything
- consider Windows 8 Pro upgrade for $40 (January 31st deadline)