emachine E528 not booting

A friend gave me his laptop to try and fix it for him (I've tried and failed).

He doesn't know anything about computers and lives only in his web browser, so he has no idea what the problem could be, he has no disks or windows licence key (Rubbed off under).
The computer is running windows 7(not really at the moment ) and it won't boot, it takes forever for "windows is loading files to appear" (Trying to load advanced setup I think) and then all I get is the windows 7 blue screen with the little white bird in the back like on log on but nothing else, just the background in low res.
The same thing happens when I try to load windows RE from a disk, trying both 32bit and 64bit versions... I cant tell which one it is but I think it's 64bit.
I also tried to repair using windows 8 install disk, it hangs the same way (different background).

So I decided to see if it would run ubuntu live cd from memory stick and it did. I will be installing ubuntu for him as he has no licence and only uses web. It hangs on install at wireless network screen... as its searching for a place to install in the next part??

I think his hard drive is gone. It's not the ram as I ran a memtest. So I went and opened disks and did a smart test which kept failing at 10% and I got one which went up to 90%. These are the results:
-------------------------------------
Self-test Result Last self-test failed (read)
Self-assessment Threshold not exceeded
Overall Assessment SELF-TEST FAILED

1 Read error rate 5040(Normalized: 198, Threshold: 51, Worst: 198) ok
3 spinup Time 1second(Normalized: 185, Threshold: 21, Worst: 145) ok (every one down is “ok”)
4 start/stop count 4487(Normalized: 96, Threshold: 0, Worst: 96)
5 Reallocated sector count 0 sectors (Normalized: 200, Threshold: 140, Worst: 200)
7 Seek error rate 68580 (Normalized: 1, Threshold: 0, Worst: 1)
9 Power-On Hours 1 month 22 days (Normalized: 99, Threshold: 0, Worst: 99)
10 Spinup retry count 0 (Normalized: 100, Threshold: 51, Worst: 100)
11 calibration retry count 0 (Normalized: 100, Threshold: 0, Worst: 100)
12 Power cycle count 1958 (Normalized: 99, Threshold: 0, Worst: 99)
191 G-sense Error rate 271 (Normalized: 1, Threshold: 0, Worst: 1)
192 Power-off Retract Count 102 (Normalized: 200, Threshold: 0, Worst: 200)
193 Load/unload cycle count 59316 (Normalized: 181, Threshold: 0, Worst: 181)
194 Temperature 41° C / 106° F (Normalized: 106, Threshold: 0, Worst: 101)
196 Reallocation Count 0 (Normalized: 200, Threshold: 0, Worst: 200)
197 Current Pending Sector count:333 sectors (Normalized: 196, Threshold: 0, Worst: 196)
198 Uncorrectable Sector Count 0 sectors (Normalized: 100, Threshold: 0, Worst: 253)
199 UDMA CRC Error Rate 0 (Normalized: 200, Threshold: 0, Worst: 200)
200 Write Error Rate 0 (Normalized: 100, Threshold: 51, Worst: 253)

-------------------------------------

So I think it's bad sectors but the test says disk is ok?
So I found this online and put it in terminal to find bad blocks
<< sudo badblocks /dev/sda1 >> using my own hard drive location(sdb3)
A bunch of numbers appear every millisec in the terminal with the last 20mins and its still going (@155676202 now)

I don't know what the problem is even though I just thinks its the hard drive .
Is there 155676202 bad blocks?

I'm basically asking if anyone knows what could be wrong with this machine and how can it be fixed....
Thanks


P.S. Sorry for the annoyingly LOOONNNGG report
I'm also not a linux user, it was just the first thing that came to mind as I've used it a few times as a free OS, so if recommending something linux use newbie language or some other method is good too.

Thanks again to whoever might be able to help me.