You can try to access the drive to rescue any files using Copy & Paste - in Windows Recovery Console
or slave it to another PC to copy out your files. Always keep all files backed up, preferably in real time with a plan like Sync, Backup and Store your Files to the Cloud with Skydrive - Windows 7 Forums.

Once you replace the drive, run a Clean Reinstall - Factory OEM Windows 7 with the Product Key on COA sticker.