If that is a new system, take it back to the store and make them plug it in and show them that.

You may be able to get more life out of it, buy running a full hard disk scan, you can use one of the tools on Hiren's Boot CD, You boot to that, and go into Dos Programs, Hard Drive Tools, and find your make of hard drive, use the tool to check the status. Link to Hiren's is below.

If it finds errors, then use the full surface scan. If you have a WD or Seagate hard drive, you can use GWscan, which is a gateway tool for detecting errors, WD uses it now too. The full surface scan will take about an hour on new PCs.

If your SMART error is serious, then GWscan will be prevented from running, if that is the case buy a new HD NOW, not tomorrow.

How old is the system, even when new HDs go out sometimes and have to be replaced - If you have a warranty still in effect this will be taken care of by the warranty.