I just came back from the Hitachi store to get my disk drive serviced. Warranty is valid till December 2011 so i should be all set. They then drop the bomb on me. Told me that it'll take them 3 weeks or more to get it serviced. I can't wait 3 weeks.
So i bought another drive. 1TB Hitachi 7200 RPM (don't know why but Hitachi has always lasted much longer for me than Samsung or Seagate). But i still gave them my 500GB for servicing. Perhaps when i get my disk drive back, i'll keep it as a backup just in-case one of my drive fails again.
So i guess the issue is definitely with the HDD. I've been moving, deleting, working on the new drive for an hour now and it's still kicking strong. I also bought an additional SATA cable and another cable that i don't know what it's called. Unfortunately though, i was not able to copy anything from my 500GB. Everytime i initiate a copy/paste, the drive shuts down a few seconds in. No way to get my data out. I'll have to start all over again.
Well anyways, thank you to everyone that helped. Sevenforums never fail to assist me when i'm in trouble. Reps coming your way.