return code 7--replace or reinstall

I have a 3-year-old Dimension 4600 that's been kind of sluggish lately. I ran the hard drive test and got a "Return code: 7" message. I've backed up all my data since I know this means something is wrong and my drive (80 GB WDC Ultra ADA/100, 7200 RPM) could crash at any minute. But everything is still functioning alright, just a little slow at times (music skips in itunes when I open Internet Explorer, some programs take a long time to load, but then run fine after loading).

 

My question is: should I (a) get a new hard drive and reinstall, (b) reinstall on my current hard drive and see if the return code 7 goes away, or (c) do nothing and live with the sluggishness until the hard drive dies? I'm leaning toward (b), but don't want to waste time reinstalling only to find it does nothing or my drive crashes shortly after. My main priority is to get my computer running like new again now and a ways down the road. Is there a chance that a reinstall on this old drive will be able to do that? If you think I should buy a new drive, any insight on what kind to get?

 

Thanks!
Peter