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A "hard reset" to most users is holding down the power button for 10-20 seconds or so, equivalent to the same thing on a laptop or other PC, forcing it to reboot. This does not delete or modify any data on the phone, but files open when this occurs could be lost.
Originally Posted by Roxxygen
A factory data reset or factory default returns the device to "out of box" status, that can be done in a couple of ways, Golfdriver97's instruction link a few posts up talks about it.
Restoring or flashing factory images uses a PC and LG Flash software to re-image the entire phone with a factory original software image, often needed if the device becomes unbootable, corrupted, or you need to remove any traces of rooting or other modifications from the phone.