Verify Disk failed.

I would definitely take it in to Apple and let them run their tests on it, if they find it defective they will definitely replace it for you.

 

Insert Install Disk 1.
Boot from it.
Go to the Menu Bar.
Go to... whatever it is, but Disk Utility is there.

Repair from Disk Utility.

Taking it to Apple is not what you want to do.

 

It could be a simple file system structure error. Try to repair from your install disk as per the post above. Why wait for Apple to do it?

 

You need to run Disk Utility from another volume so that you can execute a file system check on your internal volume. Do as Tallest Skil suggested because the most likely reason for that message is file system corruption, not hard disk failure.