I have a Segate 160G that after I installed it several months back and attempted to install software on it, i kept GETTING error messages on it.  I ran their OnTract or OnStar Utility I was told VIA their website that I could return the hard drive at MY expense for a NEW one.  Now long ago and far away there was a piece of software where you could 'fix' the sector damage (now I am dating myself here).   Anyone out there have anyting like that???You can't fix sector damage. A damaged sector indicates a problem on one of the platters inside the drive. A modern hard drive CONTAINS spare sectors that it can activate if it detects a problem with a sector. This happens automatically so if you're seeing bad sectors this means no spares are available.
I don't know the utility you've used but I do know that Seagate's official hard drive diagnostics software is called SeaTools. You should test your drive with it to get an accurate diagnostic.I would back up any DATA i needed off of that drive and take advantage of Seagates offer...they are no longer giving 5 year HDD warranties to my knowledge...