So you tried formatting from inside windows? I know for a fact that you can not format the c: drive b/c the OS is on that drive and is using the C: drive so formatting is impossible. The easiest way to check the HDD would be to take it out and put slave it into another computer. If there is nothing wrong you should be able to read all of the files. If the HDD is bad then you wont. If you slave the HDD you can also rest assured that the HDD will no longer be used as a primary so you should no longer get the "in use by another program" message. From there you should be able to delete that one file and/or format the drive.