The moon is heavily cratered, and so is Mercury, and it looks like earth is, too, although erosion and other action has obliterated a lot of the obvious earth craters. There was a lot of big stuff out there at one point.
The current theory, because simulations have show that it works, is a Mars-sized planet hitting "Earth I" at an oblique angle, destroying both planets in the process but leaving enough debris in orbit to form the moon. That collision resurfaced the Earth and may be responsible for why the Earth still has a liquid interior, so much heavy material in its core, and so much water. See
this article for some pictures of the simulations.