Bummer. There are recovery services but they cost a fortune and don't always work (depends on the fail). Most people just lose the data. Now that you've been smoked by dead drive its time to think backup.
One approach is to get an external USB drive and then run the builtin windows backup process. Make sure you build some bootable win CDs to get you booted to do the recovery. Second approach is to get two drives and run in Raid1 mirroring which gives you up to the last second recovery on hardware fails (nice), but makes you vulnerable to virus taking out system and leaving you with no data (bad). People who run raid1 usually have a time backup also.
If the failed disk was from an prebuilt system (e.g. HP, Dell, etc.) then either you made backup disks already or you no longer have a copy of windows. All of the major builders will send you another set of recovery disks for $10-$20. Much cheaper than buying a new copy of windows. If you do go for a new copy of windows (or download win8) make sure you get the drivers from your PCs manufacturer. If you built PC youself then you have windows and know to reload chipset drivers, etc.