Over time portions of the hard drive become completely unreadable, these are called bad sectors.
The rest of the drive is ok and the system will compensate for the bad sectors.
Eventually though the whole drive can become corrupt and die.
My recommendation to you right now is to back up all your personal stuff on to cd, ie pics, word documents etc.
To see the state of your hard drive for yourself go to Start, All Programs, Accessories, Command Prompt.
This will bring up a screen that you will be totally unfamiliar with but look closely as you will see a flashing cursor at the end of the text.
Type in exactly what I put;
chkdsk c:
This command will scan your hard drive and report any bad sectors.
At the end of the report if any bad sectors are shown you can type;
chkdsk /r
This command will repair, if it can, any bad sectors.
For more information regarding this look here;
http://support.microsoft.com/kb/315265