@beckmart: answers to your q's:
1. it was my internal drive. Sorry for not mentioning that clearly.
2. As far as what tools to use, the Apple tech used SMART by Volitans: http://www.volitans-software.com/smart_utility.php to uncover what Disk Utility couldn't. I've heard mixed reviews about Tech Tool Deluxe, but it apparently used to come with Apple Care. I have not been able to find it if that's the case, but it's mentioned by the article Kappy mentioned from XLabs.
3. Yes, people here could very well have defective hard drives and not know it. Disk Utility did NOT uncover the real problem: a failing HDD.
@kappy: EXCELLENT article (The XLabs new FAQ on the -10810 Problem). Thank you.
It totally makes sense, and confirms many suspicions. Error 10810 is a generic error and only the tiniest indicator that something is amiss.
In my case, the Apple tech explained that the bad sectors were probably where certain kernel or driver code was sitting, and therefore behaved poorly upon access.
Then the mirage that Disk Utility created (HDD verified and "ok") allowed me to proceed (and waste tons of time) down another troubleshooting path.
This is an Apple problem, ultimately. They need to have factors engineered in the OS kernel that doesn't allow such things as Zombie Processes and Fork Bombs from 3rd party software, so that the process table doesn't get filled up. Perhaps apps should be forced to declare their process threads up-front, so OS X can crash them if they're destined to take down the whole system. The fact that this doesn't happen makes OS X very UNPROTECTED from 3rd party instances, which was the whole point of moving to Unix and away from OS9 ten years ago.
I suppose we'll see if Lion addresses it. However, apparently this problem has lived through several major OS X versions.