I have a hard drive with bad sectors. It doesn't boot, because some of the windows installation files were lost- but I'd imagine if I formatted it, it might work. The bad sectors would not be repaired, but they would be skipped over and left unused.
I fixed one a month ago that, well, basically the entire hard disk was nothing but bad sectors. After much turmoil, I finally got it formatted and installed windows, but still showed many bad sectors. Then I ran chkdsk /r, and viola - no bad sectors.
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