After backing up but before giving up on the drive- it could be the power supply, as well; I had a similar problem myself with a new hard drive that kept dissappearing from the machine- event log errors abound, delayed write failed, etc. Then the computer would get really confused since the pagefile was on the now inaccessible drive.
Not sure what exactly happened, but I guess it managed to recover by creating a new one on the system drive.
and then every single running application crashed. I managed to solve the problem by removing some items from the computer- thus less power consumption (the PSU was a real lunker).