|From the error message you provided, yes your hard disk is failing. There is not much we can do to repair the damage, and from your description of the performance there is not much life left in the drive.|
I would recommend backing up any important information from the laptop, and replacing the hard disk.
You can either do this yourself, or take the laptop to a local computer repair shop. This should not cost too much to do, depending on what size you want the new hard disk to be, and the dealer you are taking it to.
If you need help backing up data, or would like instructions on how to replace the hard disk, just post back here and I will try and help as best I can.
EDIT: I forgot to mention if the laptop is still under warranty, contact DELL.
They should copy your data off the drive, and replace it with a working one.
EDIT2: Copy the data off the drive and contact dell for a replacement! My mistake!!