upgrade this old MacBook Pro to mountain lion?
The second part is trivial, install Lion or Mountain Lion and let it upgrade everything. That will create a recovery HD where you can then reboot and erase the main volume. If you save the installer after the first download, you can avoid the download the second time.

My experience is that the performance of older computers is as good as or better than the old OS - especially when you are erasing things and migrating files over later (or by hand) as much support for older systems was dropped making Mountain Lion fairly streamlined and responsive.