I know I’ve been asked this question quiet frequently and I finally got around to digging up the answer. Here are the details from the Nortel technical configuration guide with a few grammar changes and some formatting thrown in.
You can factory reset a Nortel IP phone that is already running UNIStim firmware release 3.0 or later. You will need to be running the following firmware at a minimum for this procedure to work;
IP 1110 (0623C6E), IP 1120E (0624C6E), IP 1140E (0625C6E), IP 1150E (0627C6E), IP 1210 (062AC6E), IP 1220 (062AC6E), IP 1230 (062AC6E), IP 2001 (0604DCD), IP 2002 (0604DCD), IP 2004 (0604DCD), and IP 2007 (0621C6D).
The UNIStim firmware release 3.0 for IP Phones introduces the ability to restore an IP Phone to a “factory default” configuration. This can be useful when redeploying an IP Phone from one location to another, when starting to use an IP Phone with unknown history, or to reset to a known baseline configuration.
With UNIStim firmware release 3.0, and greater, the following keypad sequence is used to reset all provisioning parameters to a “factory default”:
Where the MAC corresponds to the MAC address of the IP Phone which can be found on a label on the back of the IP Phone.
Since a MAC address can contain the letters A through F, the letters A, B and C can be entered via the  key on the dial pad, and letters D, E and F can be entered via the  key.
For example, an IP Phone with MAC address 00:19:E1:E2:17:12 would be reset to “factory default” when the sequence **73639001931321712## is entered on the keypad.