I have used the lastest version of TuffTest to low level format a hard disk with bad sectors. What this will do is to de-assign the sectors that are bad and substitute reserve sectors for the bad ones. After the low level format ScanDisk will no longer report bad sectors. This is fine if you have an anomolus bad sector. But if this is the beginning of drive failure, bad sectors will reappear quickly. If this is the case, trash the drive, it won't be worth the agro.
Having said this I would reiterate lgebhart's sage advice Backup!! Also keep in mind that lowlevel formatting is totally destructive, so you will have to save anything on the drive that you want to keep.
tkral