Like tjk is saying, you need to back up all your data and files to an external drive (if you don't have one a 500 GB one runs about $50, and if you happen to get a seagate go flex it contains a 2.5" sata drive, you can always take the drive out of the enclosure and install it in your mac, they make 500GB to 1TB in that size and then you could put your 320GB in the enclosure...)
Anyway, after you back everything up, get ready to wipe the drive and install a fresh copy of OSX Lion.... You'll need to shutdown the mac, hold down option key and select the Recovery partition from the startup drive selection menu. After that you'll see a list of Apps you can run while in recovery. Select disk utility, select your OSX parition and then select the erase tab. Set the format to OSX Extended journal and erase it. (Once you've erased the parition everything will be gone. That's why you made the backup of your data and files. The idea here is to not use a time machine backup because whatever was wrong should return so we want to start fresh.) Now exit disk utility and select REINSTALL OSX LION from the menu. Your mac will now redownload lion from the recovery menu and reinstall it. It takes a while so unless you have a bootable USB take a nap or watch a movie.... After about 45 mins (13 mins if you have an SSD) you should now be at the WELCOME screen and registering, etc...
