@Hazza
Depends on how much you want to spend and how badly you need the data on the drive recovered. If it's super important/valuable, then contact
VOGON (There DE office is in Munich) They charge based on IF your data is recoverable and how many Megs your data to be restored is. These guys are the Uber Pro's and it will be $$ well spent.
If its something that isn't so Important, you can try one of the many file recover programs, but it sounds like your HD is just dead/dying. Also keep in mind the more you screw with it after now the more chance you will loose everything.
@Astro Rabbit
If you have $$$ to spend on a backup solution for 1TB then you have 2 options.
1. A LTO-2/3 Drive, 5-6 tapes, and lots of time. To make the entire process automatic Look into getting an Autoloader/Tape library.
CONS: Can be very expensive. Backups/Restores will take a long time.
PROS: It will cover your 1TB requirement just fine, perhaps even more.
2. A mirrored HD setup of what you have now. Whatever you have installed, DOUBLE IT!! and configure the two RAID systems to mirror each other.
Do a google search for RAID5+1 (Mirrored Raid 5). If your really paranoid Look into RAID 6+1.
CON: Can be very expensive.
PRO: Uses cheaper mediem (Harddrives) and is a faster backup solution as all file backup is done in realtime.