Welcome to the Apple Support Communities
As you are using an iMac, I highly recommend you to take it to an Apple Store or AASP to get your hard disk replaced.
However, if your warranty expired, you can do it yourself without any problem, but be careful. See this iFixit website if you want to change the hard drive yourself. You can also get the hard disk on that webpage
If you are sure you want to replace it, it will accept any 3.5" SATA II drive. I would recommend OWC (www.macsales.com) primarily because they specialize in Macs and everything they sell is tested, they have competitive prices and world class service and will ship almost everywhere.
I also agree with the previous poster, if you are not handy and don't feel comfortable taking apart your iMac then take it to an Apple Store or AASP to be serviced.
Unfortunately I now live in Belize and there are NO Apple stores here to take it to. In fact, there are no one in the entire country that I know of that deals with Macs. And I have no more warrenty either.
Do I absoluetely know for a fact that hard drive is dead...No. But nothing I do seems to work. I have tried unplugging everything and holding different commands down during startup.
List of commands I have tried on start up.
Command + R
Shift + Command + V
If anyone could help out so I don't have to relace it, Please let me know.
One thing you can do to see if you can repair the hard disk is to start your Mac from a Mac OS X DVD and verify the disk using Disk Utility.
To do it:
1. Insert the Mac OS X DVD that came with the computer, and press C key while your Mac is starting. A Snow Leopard DVD will also work.
2. Go to Utilities menu > Disk Utility, select the hard disk in the sidebar and verify the disk. If there's any problem, repair it and restart. If it doesn't work, the hard disk is damaged
A couple of things, when replying to a post please click Reply in the post you are replying to, otherwise we cannot tell who your communication is directed to.
Second I would recommend running Apple Hardware Test in Extended Mode at least 3 times, if errors appear then you know you have a hardware issue. We cannot always interpret the codes on this forum because Apple does not publish them, however any codes with HDD in them indicate it's the HD. You can also run Disk Utility from the Restore partition on your iMac and run Repair Disk, if errors appear you may be able to repair it. However if errors continue to come up or you cannot even get into the Recovery partition then it's almost certainly the HDD. By the way if you don't know how to access AHT or the Recovery Partion please look over:
To restart in recovery, reboot your computer and hold down Command-R after the chime (you can also use the traditional Option-key holddown, which will show all your bootable volumes including Recovery). Before long, the gray linen background appears and the Mac OS X Utilities window pops up