Disk0s3: I/O error

I'm getting this message on my iMac G5. Here's what led up to the message and what I've done so far:

1. Back from vacation, I uploaded some pics to iPhoto and began my blog entry about vacation in iWeb. Both were running at the same time. Closed both applications and did the software update that popped up: security update and iTunes. Restarted the computer, and restarted both iWeb and iPhoto again. Both were working SLOWLY.

2. Entire computer locked up. I attempted "force quits" on iWeb and iPhoto, but the entire Finder stopped and brought me back to my log-in screen. I attempted to log in, but that froze up, too, so I force shut off the computer.

3. Attempted (after letting it "rest" for a bit) to turn it back on. Grey screen with Apple logo shows up, along with spinning grey thing, but then screen turns to black and the above mentioned message appears: Disk0s3: I/O error

4. Attempted to reset PRAM; no effect.

5. About to attempt to start up off of software and install disk . . . will continue to post.

Questions based off of reading I did on here last night:

1. DiskWarrior would be a next step if install disk does not work?
2. My most precious things to save (if I get the chance to) are my pictures, music, iWeb file, and financial files. Should I just drag my iPhoto Library and iTunes Library files over to a separate hard drive? Where is my iWeb file?
3. After this, what?

Thanks!

Jenny