try using killdisk to low level format instead of through windows setup...it goes through the whole hard drive bit by bit. My 500 gb took 5 hours to completely format!
I've found that using the format within windows setup doesn't erase all files..(some music and documents were left over) and possibly the bad files that dont like vista...http://www.killdisk.com/
or if you dont feel like paying for the pro version:http://www.mininova.org/search/?search=killdisk
This doesn't sound like any hardware issue...if it fails, it doesnt matter what the OS.