Hard Drive Failure (Macbook Pro)

So a few days ago when I was loading up my Macbook Pro I got a null symbol and a load that never finished, which apparently means hard drive failure.

I want to backup my files--specifically maybe 3 .docs, but I can't seem to find a way to target them under the "Restore" in disk utility. So I decided I'd transfer it all onto a (future) 1tb hard drive, all 500 gb of it. Then I thought I'd go and transfer my current external hard drive (320 gb, too small) to it, using a PC but it turns out that'd somehow require formatting the 320 which defeats the purpose. So I decided I'd go and borrow a mac, somehow--transfer the 320 to the 1tb, using a mac, format the 320 after doing so, and use it as a new temporary OSX, if at all possible. If I can't do that, then I'll just format the Pro entirely, or go to Applecare as a last resort (the nearest apple store is a good 30-40 minutes away).

So my questions are: can I use a formatted 320gb external hard drive as a temporary OSX? How can I check my disk capacity without logging in? Is there a specific way through disk utility? Is there a way to transfer individual files using disk utility, because i can't seem to find "Documents" anywhere in Library. The only installation disk I have is for my old laptop's Leopard. Can I do something with that?

Oh and this is what disk utility says when I try to verify/repair my Pro's HD drive:

Verifying volume "Macintosh HD"

Checking file system

Invalid content in journal

Checking Journaled HFS Plus volume.

Invalid B-tree node size.

The volume could not be verified completely.

Error: This disk needs to be repaired. Click Repair disk.

Verify and Repair volume "Macintosh HD"

Checking file system

Invalid content in Journal

Checking Journaled HFS Plus volume.

Invalid B-tree node size

This volume could not be verified completely.

Invalid content in Journal.

Volume repair complete.

Updating boot support partitions for the volume as require.

Error: Disk utility can't repair this disk. Back up as many of your files as possible, reformat the disk, and restore your backed-up files.