Hard drives fail, it is inevitable. Unfortunately for you it has happened so soon, but at least it has told you it is failing giving you the change to get the data off and it is still under warranty so it'll be fixed for free.
well, it seems to have fixed its self, SMART is no longer reporting it as a problem, even after i booted from the install DVD it still said it had a problem,
so later on i stuck it in my bag, drug it to church with me tonight, set it up there, and ran my leopard install for a bit, it never mounted the tiger drive, it suddenly gave me this message saying osx couldnt repair my drive but it was "being mounted with limited access but might be capable of making a backup", ignored that, little later booted back to tiger, then poof no more problem...disk varify now reports drive is working normall...
ordered a new drive anyway, which ill keep in case i need to replace this one, and I have a new mybook 250gb coming to use for weekly drive imaging