Hard Drive Failure?

Recently, my Computer has begun to completely lock-up (for instance, A minute ago I was playing runescape, then the computer completely froze, but everything was still running, rs was still 'playing' but I couldn't do anything with it, and I know, it's in the RAM). After checking on the Bios the first time this happened, my Hard drive was showing that it only had 8GB of memory, so I formatted it, which didn't work, then I opened my computer up, and disconnected hard drive, and with nothing else to do, I reconnected it, and to my amazement, it worked. The wires were not loose at all.

Then, a minute ago, the same thing happened, but I learnt from my previous mistake, and just disconnected and reconnected it.

Obviously, I have the solution to get it to work, but I'd rather that it not happens at all.

So, can anyone diagnose my problem (I can guess it's hard drive failure, but it's never happened like this to me before)? and if my hard drive is bust, can you suggest a cheap, reliable hard drive that has roughly 200GB-400GB of memory (I live in the UK, so you can recommend stuff off Micro Direct). The motherboard has 2 SATA '2' connectors, so I could keep the current one just for extra memory (It shouldn't really be called SATA 2, because it's not, it's just a 3Gbit/s transfer rate over the original 1.5 Gbit/s).

So, can anyone help?