I get a Warning message when booting up

First...I apologize if this problem has been covered already, but I'm at work and I don't have the time to look at everything. So, with that said, here is my problem. I'm running Windows XP on a Dimension 8200, 60 GB hard drive, 1 G of RD Ram (don't know if that makes any difference), 1.7 Pentium 4.

 

Upon booting the pc last night, I got a message that says- "Warning: Dell's Disk Monitoring system has detected that drive 0 on the primary EIDE controller is operating outside normal specifications. It is advisable to immediately back up your data and replace your hard disk drive".

 

I'm assuming it means that the hdd is going bad. Anytime I try to start a program, the pc 'freezes' and it takes a lot of time to access the program. The other thing I noticed is that when I open task manager, the cpu usage jumps from nothing to 100% and back quite frequently. I disabled most processes that had my name attached and ran EZ Armor Anti-virus. It found 4 infected files. Then, I ran Spy Sweeper, which also found several traces & items of spyware, which it quarantied.

 

Called my wife today and had her check the diagnostics lights on the back of pc, and she said the first three were solid green and the last one was solid amber. Any help would be greatly appreciated.

 

Thanks