Ouch, not good, Mark.
Looks like the drive already reports (faulty) stuff via her S.M.A.R.T. diagnose and Windows reads that warning level and stresses the need to backup.
In very, very rare cases this could just be a problem of the cable connecting the drive, but some 98% or more will actually show that you are doing the right thing, plan for a replacement.

So lets hope that you can get behind the error and also that the installation or at least re-injection of your software doesn't take too long.

If you want to check the S.M.A.R.T. status and the actual 'too high' value on that drive, you could use http://hddscan.com/ which will give you a small table with all vital values at a click.
So it just reads what the drive is reporting and shows you some more detail. There's no test running (and stressing) the drive, just a read-out.