macbook won't boot - stays stuck on apple screen

a friend's macbook won't boot up. the computer turns on and stays stuck on the grey screen with the apple. usually, the small loading pinwheel shows up as the system is booting but that does not occur.

occasionally, the apple flashes and a "no entry" type sign shows up...

i reset the PRAM and that did not alleviate anything.

suggestions?

EDIT: It can load the Mac OS X install cd
when i hold down option key to choose to boot from the Macintosh HD it does what is described above?

EDIT2: booting onto the Mac OSX install cd I tried to verify/repair the disk...the errors that came up where: Invalid Volume Header, Invalid node structure, Volume check failed.

then a pop up with "ERROR: The underlying task reported failure on exit"

any advice?