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A SMART check is a warning that more serious trouble is likely soon to come. The drive may be able to function normally for a while, but it has internally detected some set of parameters out of range that its designers have determined to be an indication of likely imminent failure. A typical scenario is when the drive has remapped to many bad sectors and is running out of spare sectors. It may still boot today, but maybe not the next time. As Lsmall states, you should back up your system and especially any cherished data ASAP, i.e., immediately. If you made a "rescue disk" CD/DVD when you first bought the system, now would be a good time to find it. If not, make one while you stil can. If you're geek-inclined, you might be able to swap out the drive and restore the system and the backups yourself, but if you're unsure, or the stuff on the system is too valuable to chance, shut the system down and seek knowledgable assistance.
The S.M.A.R.T. check is a way for the hard drive's controller to report problems to your computer so that you can be warned when there's an issue. Since it's a hardware problem, you'll want to replace your laptop's hard drive - but make sure you backup your files ASAP so that you do not lose data