go completely out. What ahppens is they gt intermittent shorts, or increased interference. But if SMARt found unrecoverable sector, thats a critical HD flaw. At this point, your best bet is to "zero" the drive using a HD format utility..
http://www.samsung.com/global/business/hdd/support/utilities/ES_Tool.html
download estool and burn to cd 9make sure to get cd version). Boot from it and run the low level format option. Accept its default values. This will go over your entire HD, and mark out any sectors it knows to be bad. This may or may not work depending on the cause of the unrecoverable sector/s. If it does work, it should allow you to reinstall windows, BUT, I would highly recommend looking into a new HD, as once they start to go, they rarely stop...
If the machine was on a ups, and some one turned off the ups during a write, you may have damaged the platter a little... should not have, but possible. Low level formatting can take HOURS. So be prepared. I doubt its your cable, that would cause high level problems, not reported in SMART.
Try this, and PM me on monday and let me know how it went.
Just read Oh Smegs last post, and bumping moving the HD could do this much faster then power off. But then again, it could also just be wearing out...
DBAN he mentioned is another good product, and very simple to use. Just be VERY careful booting it on any system with data on a HD you want to keep.