Acer aspire 7730 - hard drive issue? restore lost password issue? so many issues - need professional

Hi everyone, this is my first post asking for help.

I own an acer aspire 7730 laptop. It originally came with windows vista home basic as it say on the sticker underneath.

I lent it to my friend sometime ago while away and he put a fake version of windows 7 on there and now it's all messed up.

When i boot up normally, it used to start freezing, wouldn't recover and so i had to sut it down, hadn't used it for over a year and still the same problem. However yesterday i turned it on, reset the bios to normal default settings, saved and exited and now when i load up it appears with the normal black acer screen with writing at the bottom "press f2 to enter setup", and then the next page it says the following on a black background:

SMART failure predicted on hard disk 0: WDC WD1600BEVT - 22ZCT0 -(S10)  
WARNING: immediately back up your data and replace your hard disk drive. A failure may be imminent.
Press f1 to continue.


Does this mean i need to buy a new hard disk drive and physically install it? And if so anyone know any trustworthy genuine acer sites i could buy from?

The thing is, it never used to say this to me until i changed the bios just yesterday, so why now? Don't want to have to Spend money if i don't have to, because i simply don't have it.


My second problem.

I went to do a restore (btw i don't have any disks or any software disks at all and im more than happy for everyhing to be earased, it's mostly my friend stuff on there anyway)

by pressing alt + f10 and the following page comes up with

EDIT BOOT OPTIONS -  at very top of page


Edit windows boot options for: windows 7

Path:  \windows\system32\winload.exe

partition: 2
Hard disk: bec762e8

[  /NOEXECUTE=OPTION
                                                                                                                                                                                      ]

The very last part with the "option" in it i can type in, what do i do?



I tried hitting enter and it took me to the next blue page like a windows opening page but with the option to choose my country and it asks me for a username which is automatically put in for me as


username: ******
Password:           

I dont remmeber creating the password and my friend said he never did it. So what can i do?!!!!

So lost, so stuck it's unreal, please help?

Thanks guys.

[edited for privacy]