If there's data on the drive you need that isn't backed up start here:

Buy a notebook to desktop drive cable or an external USB 2.0/firewire 2.5" drive enclosure, attach the drive to a working desktop or notebook and copy your data for backup.

DO NOT PROCEED WITHOUT A BACKUP - DOING SO COULD BE FATAL TO YOUR DATA.

Return the drive to the notebook. Boot, press F12 and run the extended diagnostics on the drive. If the drive passes, skip the next step.

If the drive fails and you're under warranty, call Dell, report the error and they'll ship you a new drive.

If the drive fails and you're out of warranty, bin it and replace it - any notebook 2.5" drive will work.

If the drive passes, you can continue to try a repair (which fails more often than it succeeds) or bite the bullet and reinstall everything from scratch.

Recovery usually fails to restore the registry; in about 70-80% of all cases, it's a hardware fault that causes the problem.

It seems there is only some problem with the Windows.
Try to recover the OS using the setup disk.
Remember to backup your data as ejn63 said.

Backup your hd and clean install