Sounds like your hard drive is toast.
Do you have a recent backup of your data? If not, there's a trick involving a freezer, a ziploc bag, and fast file transfer that can sometimes get you the essentials.
If the macbook is still under warranty, its not a big deal and apple will repair it for you.
If the macbook is no longer under warranty, the hard drive is pretty easy to replace by a user to save on the outrageous labor costs of having a shop do it (technically the hard drive is user-upgradable). New hard drives run around $100 depending on the size and speed, check out newegg.com.