missing vgaoem.fon, i/o device error, windows cannot reinstall, please help!

Yesterday morning when I booted up my dell 8100 I an error message popped up on my screen and windows wouldn't start. The message is as follows: Windows could not start. The following file is missing or corrupted \windows\system\vgaoem.fon. You can attempt to repair this file by starting Windows setup using the original setup CD-ROM. Select 'r' at the first screen to start repair. I found what I thought was an easy solution on http://support.microsoft.com/kb/315338. But when I try to expand the file from the cd it says it couldn't expand the file. I thought this may have been the cd so I tried copying the file onto a floppy and it came up with the same error. I tried taking out the hd and putting it into another computer so I could copy the file directly into the right folder but it came up with an I/O error, which I think was "The request could not be performed because of an I/O device error." This was very strange because I could access the other folders fine, just the system folder had a problem which is frustrating because all I had to do was put a file back in. The next thing was a repair of windows, the first time around it couldnt delete a whole bunch of ini/inf files or something and I had to keep skipping them, in the end I canceled it and redid it. after a few tries windows installation has finally come to the conclusion that the drive is corrupt. Check disk also stops at 75%.. I'd just like some1 to confirm whether there's any way of fixing it and if it is actually dead (its probably about time anyway, it came with the dell when I first got it). When I plugged my hd back into another pc to retrieve the files on my desktop I cant access hardly any of them. I can see the files but when I attempt to run them I just get the I/O device error message. Aaaahh! Is there any software out there that will let me retrieve these files? some of them I can do without but there's important ones of my holiday that I have on there which I cant retrieve a single one of.. Please help!