I ran this HD utility called CrystalDiskInfo that displays some of the S.M.A.R.T. information on my drives. It is displaying a "Caution" warning on one of my drives because its "Reallocated Sectors Count" value is 263 (ideally it should be 0 as it is on all of the other drives I have tested).
I posted this question on another forum and the general consensus of the responders was to back up immediately and get rid of the drive. The drive is fairly new and only has 4575 hours on it. I just learned about this utility a few weeks ago, so I don't know when the reallocation of these sectors may have occurred, but it hasn't changed.
Can I trust this drive?
Update (9/27/2009): That reallocated sector count stayed at 293 until about a week ago when I noticed it went up by 1. Just yesterday, I noticed it's up to 659. It's under warranty and is going back to the manufacturer for replacement.
Best Answer
In my experience it's a toss-up. I've had one drive that had some reallocated sectors and a nasty whine that ended up outlasting some drives that gave no warnings before dying a miserable death. I actually chucked it because it was so noisy, rather than data loss.
However, for me, personally, at the first sign of problems in a drive, I backup then swap it off. Drives are cheap, online backups are cheap and if you're anything like me, your time is better spent elsewhere than trying to recover a drive.