I had to find out about this the hard way. After yesterday's update, apparently something happened to the SD card, and it would cause my phone to reboot. Took a lot of testing to figure out the issue.
During that time I thought I might have had a corrupted file so I wiped the whole thing.
It took me some time to figure out how exactly to do that, so I thought I'd share the steps
First, power off the device.
With it off, hold down Vol- and Power until you're brought to the bootloader screen.
Personally, I'll start by pressing Vol-, and then holding it while I push Power and hold that until the bootloader displays.
From there, use Vol-/+ to toggle options until "Recovery" appears
Hit Power to confirm you want to enter that mode
You'll be met with another Moto screen and then a screen with a little Android dude under going surgery with 'no command' being shown.
This is the part that threw me. To bring up the recovery mode options you'll have to hold Power first and then press Vol+ then let go of both. (don't hold power down too long or you'll just get it to reboot)
From there you'll see the options turn up. Use the volume keys to toggle through your options and enter to select.
And now you know.
And knowing is half the battle!