If the bad clusters are in the boot area, that could be the cause of the problem.
If defects are found during this scanning process, those areas get "locked" so they are not used again. One way a hard disk fails is to start developing defects in the platters at an accelerating rate. I would recommend running chkdsk often, at least for awhile. If you run it every few days and each time, it finds more actual defects, it is time to replace the drive before it becomes non-operational.
The bad clusters are not necessarily defects. They could be corrupted contents, typically cause by writing operations that are stopped prematurely. Depending on the type and extent of the problems, specific files may or may not be able to be restored. Depending on which files are involved, it may or may not make a difference.
As far as a new drive, I believe your laptop (pre-2011 motherboard) can take up to a 2 TB drive if you can find one that will fit. With a new drive, you're starting from scratch--formatting, installing the operating system, reinstalling your software, reinstalling peripherals (drivers), transferring old files, setting all of the configurations and customizations, setting up your network/email/internet, etc. You may have to deal with transferring licenses (Windows and some software). With Vista, if you don't have the original disks, you may not be able to use the recovery partition (or a copy of it), to install Vista on a new drive (or the old one after wiping Vista). However, if you are able to, consider putting both operating systems on the drive in a dual-boot setup. That will give you the ability to run anything you previously could with no compatibility issues. If you can't, don't sweat it. Compatibility going from Vista to Win 7 is pretty good and you will benefit from not losing a big chunk of disk capacity for a second OS.