Is there any hope for my hard disk?

hi, my samsung HD161HJ (sata) recently failed on me..

When I on my com it states "Windows could not start because the following file is missing or corrupt. C:\windows\system32\system".

First, i did a memtest on my pc to make sure its not my other harddware thats causing the problem.No prob was detected

I did a chkdsk /r /p, but it doesnt helped. I tried connecting the harddrive to my usb adapter to retreive all my data, but an error message popped up. So i thought, what the heck, just reformat it.

However I couldnt format the drives in my hard disk during re-installation of xp, it states that the hard disk might be damaged.

So i ran EStool(diagnostic tool from samsung), and it states no error.
I ran HDDregenarator, it states no bad sector..I did a low level formatting through the EStool and tried reinstalling XP, still the same prob appears again..

I tried running Darik's Boot And Nuke, and an error message appears, saying a non-fatal error had occured, and it might be caused by a bad sector.

I fixed the same harddisk again to another PC, as master..but still the same error appears again...

What might be the problem?

ohhhh man! not sure...any hd u can recommend? heard WD's good...