Boot into Windows 7 DVD, select Repair on second screen, then click through to Recovery Tools list, open a Command Line to type:
chkdsk C:
chkdsk /r
After it runs, try booting the GWScan CD (it should autostart) to run diag/repair on C hard drive.
When it is finished, you can use it to write Zeros to your Acer HD, as long as you are sure it is not zeroing the data drive instead. This gets the HD cleanest possible.
Then boot the Windows 7 DVD, select Custom Install, click Drive Tools to create New partition, format before install.