Your hard drive may have a software or hardware issue. If it's a software issue there's a chance ti can be repaired with Disk Utility software. To do so, boot the computer with your installation disk and use Disk Utility to scan your internal hard drive. If Disk Utility doesn't see the hard drive then it could be a major HD problem and other applications like DiskWarrior can be used to rebuild your HD index.

A hardware problem can be caused by a faulty mechanism or a faulty electronic board. You cannot repair it so you need to replace the HD. Do you ear the hard drive spinning when booting the PB? Any click sounds?

This means that your system can't find a system folder. Boot from your installation disk by putting in the disk at start up and holding down the "C" key. Then run Disk Utilities. If this doesn't fix it you may indeed have a bad hard drive. Here's the instruction on hard drive replacement:

http://www.ifixit.com/Guide/Repair/Insta...

This model uses a ATA drive. Here's a good replacement drive.

http://www.ifixit.com/Apple-Parts/320-GB...

It's not to hard a fix but requires some skill and attention to detail.

Good Luck

This often indicates a bad hard drive-- but just try restarting it by holding in the power button. I think it means that your computer can't recognize your hard drive correctly?