How to fix 'Windows could not start because the following file is missing'

The story :
Just as I walked into office, sat down and had a sip of water, my phone rang. That's usually bad news on a Monday morning. 


2nd floor purchasing officer called. Her PC can't start, need to press 'r'. Yes, that's Windows files corrupted. That's what happend when system can't find the right files to start Windows. The tale tale sign of hard disk problems. (picture below)

How I check :

1. Don't bother to press 'r', you need the windows CD and use Dos command to check (hey, where's my 2 inch thick Ms Dos 6 book?).
2. Just take the hard disk out and connect it to my test PC running Windows 7 (another PC). 
3. Backup all documents in desktop and my document (normally files type doc, xls and pst need to backup) into my network storage drive.
4. Use Checkdisk and DiskScan 3.3 to confirm if the hard disk is defective.
5. You may use Hiren Boot CD to diagnose the hard disk problem without taking out the hard disk. Just download the CD image, Burn it into a Bootable CD. Use the CD to boot your PC and run HDDScan 3.3.

What I found:

Checkdisk and DiskScan confirm bad block and damaged files system. (picture below)

How I fixed it :

1. Change a new hard disk and re-install Windows and all applications.
2. Restore files from network drive.

Additional notes :

• You may try cloning the damage hard disk (with Acronis TrueImage or DiskClone)  to a new one only if checkdisk (Scan & recover bad sectors) can fix the drive. This will save you time on re-installing Windows.
• But that depends on luck and the amount of bad blocks. For drive with minor bad blocks, it may work. But for badly damaged drive, better start from scratch then 10 step back.