Comment 62 for bug 438136

From what I have learned about SMART over the past 2 years is that SMART doesn't fail until the Normalized value falls below the threshold.
In my case my reallocated sector count is:
Normalized: 179
Worst: 179
Threshold: 140
Value: 161

palimpsest is giving me a warning that my disk has many bad sectors, and reporting that there are 161 bad sectors.
The question is what is a bad sector? The smart label is reallocated sector count...not bad sector count.
It is common for a hard drive to reallocate sectors that have read errors...this happens transparently by the firmware. Drive manufacturers design the drives with reserve sectors for this behavior. Only when there are no more reserve sectors do bad sectors start appearing.

Furthermore, a hard drive manufacturer is not going to exchange my drive just because Ubuntu is saying that is is failing.