Actually, S.M.A.R.T is a potential lifesaver. Just a few weeks ago, I had a customer who's BIOS reported "HDD Bad. Backup, repair and replace." The drive appeared to be working normally, but who knows when it would have completely died. Enabling S.M.A.R.T alerted us that the physical integrity of the drive was possibly compromised, and allowed us to RMA it without any serious data loss.
I believe S.M.A.R.T works by monitoring the amount of times the drive controller encounters an error when reading from the disc. A certain amount of retries is probably normal, but if it gets excessive, S.M.A.R.T decides the drive has almost had it and lets you know. Groovy.
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