Is the drive a 10GB? It may be one of the bad Western Digital drives.
As for the above advice, I HIGHLY AGREE! DiskWarrior is something you can't live without.
When you get your drive back in order, backup your data and low-level format it. Use the APple Software Restore CD to re-install the software and apply all needed updates. I don't allow a single Mac to be placed on a desktop until that is done!
Good Luck,
Scott