If it is a desktop, I would just install a second HDD as backup (if you order one e.g. from Newegg, do not forget the Sata cable). There I would configure a 60GB (bigger if you have big games) partition for the OS which you leave on standby in case the other HDD really fails. Then 1 partition for data and transfer my data out of the blinking disk. If there is a good chunk left, you can use it for a partition to which you can image.
On the blinking disk I would run a chkdsk /r