Will it boot OK in Safe Mode? See What is Safe Boot, Safe Mode? (Mac OS X)
http://docs.info.apple.com/article.html?artnum=107392 Takes a while to run, but it usually "fixes" problems.
Safe Boot takes longer than normal startup
Resolve startup issues and perform disk maintenance with Disk Utility and fsck
You must repair the HD, your best bet is likely DiskWarrior.
BTW, you might enjoy these DiskWarrior review/recommendations...
You must repair the HD, if Disk Utility or fsck should fail to repair it, your best bet is DiskWarrior from Alsoft, you'll need the CD to boot from if you don't have another boot drive...
Your best bet is DiskWarrior, you need the CD/DVD though.
But others that may work…