1st of all, I'm not a geek. :-p
Here is what I would do:
1) boot it into the bios and look at the temperature monitor. It might that the computer could be overheating.
2) if it is in fact overheating, use a can of compressed air and blow out all the vents on the laptop... prepare for dust and do it outside.
3) reboot the computer again.
4) boot into bios and look at the temperature again. If it is around or above 60 C, it's still a heat related problem but if it's down to normal... well... it's something else.
If it still has these problems, there are many options. Here are the ones I would follow:
1) make a BartPE boot disk with a copy of the windowsXP, BartPE (
http://nu2.nu/pebuilder/) and any plugins you might need for data inspection/recovery on a hard drive as well as the virus scanning tools that come with BartPE (stinger is one of them, for example).
2) boot it up using the BartPE disk and run whichever diagnostics will determine if it's a bad drive or a virus.
3) wait around for a while.
4) If it is a bad drive, try to set it up as a network accessible drive and copy off the important stuff to an other computer. (don't bother copying programs)
5) If it is some kind of virus, find out which one and do some thing to kill it... at my previous tech job we used AVG and it killed just about everything. Very special virus programs usually have special tools for free at corporations like symantec (norton) which you might need.
Bad drive extended info:
1) carefully extract it from the computer to determine which kind of drive plug it uses. Hook it up to some thing like this:
http://search.ebay.com/search/search.dll?from=R40&_trksid=m37&satitle=%09%09+%09+USB+2.0+to+IDE+SATA+2.5+3.5+Hard+Drive+Converter+CableBoot up your computer with BartPE, hook an external drive and this drive up to your computer and dump the files you want to keep on to the external drive. You could hook it directly to your computer with out using BartPE, but if it has some dirty virus... well, you get the idea.
Uh... as far as external drives go, I buy my own parts and put them together, so I am of little help.
But, if I had to make a 500GB ext, I'd probably go with some thing like this:
http://www.newegg.com/Product/Product.aspx?Item=N82E16822136320http://www.newegg.com/Product/Product.aspx?Item=N82E16817392003Yeah.
I am almost certain your computer problem is heat related, though, and if not there were 3-4 malarkeyty virus related hard drive "failures" when I was employed. In any event, you better hope nothing important is lost from there!
Peace!