There is a known problem with Seagates and S.M.A.R.T. so they end up dieing alot well before thier time, particularly if your system is prone to rebooting because of hardware conflicts.
The only real solution is actually not to skimp on the price of a new HDD that you plan to use as you boot disk.
However just be luck you were using Windows when it happened and not a Unix deritive, because you just get a few bad sectors and it drops read cycles dieing under Windows; atleast most of your data is still accessible. Under Linux you loose the entire HDD, I actually have 2 prime examples sitting in a cupboard at home that explain it better.
SMART however is also bad for Windows. As Windows will detect problems on it's own, particularly Windows XP if you HDD is SMART compliment, however if your motherboard has it's own detection running it'll turn off (without booting down) and disable access to the hardware until it had been disconnected and reconnected.
This not only makes you think a disk has died but actually causes ALOT of bad sectors and can damage the hardware more than if Windows handled it.
Personally I keep Windows itself of a basic 20GB HDD with Smart off and my data on others with it on.
What is annoying is when it was introduced like 5years ago, it was added to almost every board but NONE explained what the hell it was.
HDD Manufacturers aren't exactly forthcomming with letting you know what thier hardware is capable of either.
I'd suggest taking all the data you have off the HDD and just using it as a Storage/Backup drive now; you keep a boot sector on it, you'll just cause more and more extensive damage.