Please don't keep your Windows version a secret.
Disks are circular. A sector is an arc on the circle and is the basic unit of allocation. The disk hardware reads and writes data in sector chunks. A bad sector means that the oxide surface of the disk within the sector has failed and that any data in it can be neither read not written. It is hardware failure.
All disks, however, have bad sectors; even brand new ones. There is a data structure on the disk called the bad sector table. This table keeps track of the bad sectors so that the disk logic avoids them. Over time, additional sectors can go bad or, at least, become marginl. When they're marginal, the data can usually be read after a few tries and the I/O subsystem will do that. When the data cannot be read or written after retrying, the sector becomes bad. On writing, a bad sector isn't too bad because the disk logic will realize the sector is bad, add its address to the bad sector tabel, and write the data in a different sector.
If the sector can't be read, however, th data in it is irretrievable and you'll get an error message such as you describe. Thats obviously not good. That's why frequent backups are so vital. If the data can't be read, without a backup, it's gone for good.
There are several ways to address bad sectors. The simplest is to replace the hard drive. Backups play a crucial role here. You install the new drive, reinstall the operating system and the applications you use, then restore the backup. Now the computer is operational again and you've lost little.
Without a backup, it may be possible to recover the contents of the disk with specialized tools like SpinRite, a disk recovery tool. SpinRite never gives up trying to read the data from bad sectors. If it finally succeeds, it then marks the sector bad by adding it to the bad sector table, and rewrites the data to a good sector. Many people report that a tool like that saved their data and the disk worked like new. Considering that SpinRite costs as much as a new disk, the existence of a good backup makes buying a new drive a better choice, but without a backup and facing the loss of data very valuable to a person, tools like SpinRite can be worth the investment.
Good computer repair people can do the diagnosis for you and install a new hard drive, or you can try it yourself, if you're comfortable with it.