Test the hard drive to see if it's faulty and causing the problem. The drive manufacturer has it's diagnostic software for DOS which you can download via the appropriate link here: http://www.tacktech.com/display.cfm?ttid=287
Use IMGBurn to create a CD from the ISO file you downloaded earlier.
Then boot your faulty laptop from that CD and the testing application will open. Select the laptop's hard drive and perform a "long" or "extended" test on it. Let it run until the test is complete (make sure your laptop is plugged into mains power as the test may take some time).
Note: You may have to set the laptop's CD/DVD drive as the first boot device in BIOS Setup if your laptop will not boot from the CD.