After attempting to repair the bad sector(s), I'm presented with a nice big
RED screen to let me know things are NOT good.

0x70 - defective media
and a technical result code (TRC)

Describe 'attempt' and result of attempt in more detail.

ok... more detail...

I'm actually doing it again right now.. so that I can give you more
detail.

I boot to CD imaged with the latest Hitachi DFT and run the
quicktest....
test results say "one or more bad sectors" were found..
options at that point are "erase disk" and "sector repair"
I opt for sector repair (which says it will overwrite bad sectors)...

while the sector repair app is analyzing the media.

it does the spin spin spin spin..... pause....... repetition
it's pretty early.. doesn't get very far...

the location that it says it's at when it gets stuck is..
LBA 0x5f3750 (6240064)
if that means anything to you.

so perhaps it's ass you guessed..
bad sectors in allocation tables or directories?

I snagged the technical result code this time...
it's 70006A26

I'll have a go with that findbad application... Is there any value in
trying a "fixboot" when booted from the XP CD and having chosen the
repair option? I saw that on some websites, but I'm not sure if that
comes even close with dealing with my layer of problems.