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Contrary to popular belief, if a computer does not boot due to hard drive corruption all data is not lost and the hard drive may even be repairable. There are 2 types of hard drive damage. One is fixable by you and the other requires a professional data recovery facility.
Physical Drive Damage - Physical damage is the worst. Data recovery can only be done by professionals and can cost up to $1,500 (sometimes higher). Physical damage usually consists of bad actuator arms, damaged platters or fried controller cards.
Non-Physical Drive Damage - Non-Physical damage (NPD) is what we're going to be discussing in this article. NPD occurs when the operating system's file system (fat or ntfs) gets corrupted due to an improper shutdown (for example). While this damage is may seem really bad (if it's preventing you from booting your PC), it's easily fixable with some software that's already including in any Windows PC and a USB external hard drive enclosure.
Here are a list of items that you'll need to follow the instructions below:
Another working computer with Windows XP, Vista or Windows 7
Find out what kind of hard drive you have. There are 2 types. SATA (small flat connector) and PATA (a.k.a IDE) which has a connector with about 30 pins. An external USB hard drive enclosure with a connector for the type of drive you're going to be connecting to it (you can grab one of these at BestBuy for about $50 USD).
Please follow the steps below to perform a non-physical repair (software repair) on a non-bootable hard drive.
1. Take the drive out of the computer.
2. Connect the hard drive to the connector on the USB enclosure.
3. Connect a USB cable from the enclosure to the computer that's working.
4. Power on the USB enclosure.
5. An external drive will probably load in your list of available hard drives. You can see this list by opening "My Computer" or "Computer". Take note of the drive letter for the external hard drive.
6. Now it's time to load a program called CHKDSK (Check Disk).
7. Click Start (if you're on Windows XP) or click the Windows globe (on the bottom left for Vista and Windows 7).
8. On Windows XP click RUN, then type CMD. On Windows Vista and 7 type CMD where it says "Search Programs and Files". This will open a black command prompt window.
9. In the command prompt type chkdsk "the drive letter you want to check": /r and press enter. So here is an example chkdsk g: /r then press the enter key.
10. This process can take hours. I've had a few that took days.
11. If this command completes successfully your drive should be repaired enough for you to recover the data from it and you might actually be able to boot from it again.
A word of warning. If your drive ever has any errors on it (bad sectors) it's reached the end of it's life and should be replaced ASAP. You'll be able to see this in the report provided to by the chkdsk command at the end of it's scan.

Source: http://ezinearticles.com/?Hard-Drive-Repair-Using-Free-Software&id=3182510