Hard drive failing - Will AppleCare replace?

Hello all,
I have a hard drive that occasionally starts to make the dreaded TOC TIC TOC TIC TOC sound. Once it is done with that, I hear a high frequency beep (from the hard drive) and then I hear the normal clatter that the drive makes when it first spins up. While all this is going on, the computer is frozen. I have experienced this countless times in the past on various computers. It basically means that failure is eminent. This started in December. Since then, it has happened with a frequency of about once a week.
I called AppleCare today. The person basically said to take my Mac to an Apple Store to verify that service is necessary. Only problem is that this issue is not repeatable. Am I suppose to sit at the Genius Bar all day until it happens?
My question is has anyone successfully had a hard drive replaced under the AppleCare program? Ideally I would like Apple to send me a new drive so that I can take my original drive and place it in an external case so I can transfer the data onto the new drive. Will they do this? Or do I have to take my iMac in? The problem is that all software tests of the hardware indicate that there is no issue. I ran TechTools Deluxe and the Apple Hardware Test, both indicate no issue.
Any thoughts?
Rev A 20" iMac G5, 1GB RAM, 250GB Mac OS X (10.4.8)

Sorry for the delay in getting back to you all. My hard drive died and was without an internet connection. Just finished loading 10.3.6 onto my iMac. I still have my old drive, Apple has not replaced it yet. The short story is that my mac got to the point where I would boot it up and I would immediately receive a gray screen with instructions to power down the computer in several languages. I inserted my Tiger disc in hopes of reinstalling the OS, but it could not find a target disc to install to. I took the mac in to the Genius Bar. The tech did about the same thing I did, but he went to a disk utilities menu and found a corrupted directory structure. He ran a repair on the disk. After that, the drive was able to be mounted. Without pressing to get the drive replaced, I brought it back home because I did not like the idea of giving Apple my hard drive with 12 years of income tax forms on the drive. Wouldn't you know, as soon as I powered it up, it started clicking; it only last about 30 seconds. I have formatted the drive and installed 10.3.6 on it. I will be taking it back the Genius Bar hopefully tomorrow. I have a feeling though that these guys won't do anything unless there is some report or feedback indicating a hardware problem. I will let you all know how it pans out.

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Greetings!
I have a new 24" imac with 750 GB hard drive which has had problems out of the box (system crashing several times a day/unable to re-start/application crashes/general sluggishness).
Five re-installs of Leopard (upgrade/clean install/install and erase)in five weeks when I finally used the latest version of Drive Genius and TechTool Pro (4.6.1). Both claimed hard drive problems. Specifically, TechTool Pro reported smart drive failure (see report below, please).
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SMART
Saturday, December 29, 2007 1:18:12 AM US/Pacific
S.M.A.R.T. Self-Checks <Failing!>
Model: ST3750640AS Q
Mount Point: /dev/disk0
Capacity: 698.64 GB
Writable: Yes
Ejectable: No
Removable: No
Bus: Serial ATA
Bus Location: Internal
Revision: 3.BTH
Serial Number: 5QD2JVNE
disk0s2: Ma
disk0s3: Pa
disk0s4: Peppi
S.M.A.R.T. stands for Self-Monitoring Analysis and Reporting Technology. This test checks and reports on the status of the S.M.A.R.T. routines built into your drive. These routines monitor important drive parameters as your drive is operating. An examination and analysis of these parameters can aid in the prediction of drive failure. This will allow you to back up your data before your drive fails and the data becomes inaccessible.
S.M.A.R.T. Self-Checks
Attribute Normal Worst Threshold Status
1 Read Raw Error Rate
100 253 6 Okay
3 Spin Up Time
95 92 0 Okay
4 Start/Stop Count
100 100 20 Okay
5 Reallocated Sectors
100 100 36 Okay
7 Seek Error Rate
78 60 30 Okay
9 Power On Hours
100 100 0 Okay
10 Spin Retry Count
100 100 97 Okay
12 Power Cycle Count
100 100 20 Okay
187 Unknown
100 100 0 Okay
189 Unknown
100 100 0 Okay
190 Unknown
41 37 45 Failing!
194 Temperature
59 63 0 Okay
195 HW ECC Recovered
63 61 0 Okay
197 Current Pending Sector Count
100 100 0 Okay
198 Off-Line Scan Uncorrectable Sector Count
100 100 0 Okay
199 Ultra DMA CRC Error Count (Rate)
200 200 0 Okay
200 Write Error Count
100 253 0 Okay
202 DAM Error Count
100 253 0 Okay
S.M.A.R.T. Self-Checks <Failing!>
Tests Completed
Threshold levels are exceeded occasionally. You should consider backing up your data from the hard drive. You should continue to check the hard drive for failures.
S.M.A.R.T. Self-Checks <Failing!>
-end-

Greetings, all!
This has been my first posting, despite having owned 5 Macs over twelve years - which goes to show you how reliable they are, most of the time.
I am very impressed with the thoughtful responses, and I really, really appreciate you taking the time to respond.
Here's an update since my last posting. I picked up my repaired(?) iMac from the Apple-approved repair shop. The technician's report said (referring to the original hard drive Seagate ST3750640AS Q) "The drive has passed and boots into the OS without issue. Confirmed the smart status of the hard drive shows failed, but this is for an unknown attribute. This may not really indicate the drive is failing, but could be a possibility. Since all of the other tests have passed, I feel it is best to replace the drive under warranty for the customer.
About the new hard drive, the technician wrote: I have run a third-party smart utility on the (new, replaced) hard drive again and I have found that it is failing with the same error. The Apple test shows the smart status as OK.
I have researched this error and I have found that this attribute appears to be for temperature. Since both drives showed the exact same error, this attribute can be safely ignored for smart status. I was not able to replicate any issues with this machine other than the smart status failure so I do not think there is any other hardware failing in this machine.
If the customer continues to have issues, I would recommend reinstalling the OS one more time. If the issue still persists after this, then the customer should bring in the computer when issues are still happening so we can try to determine the cause of the problem better.
At first, my iMac was performing much better, but as I began to migrate data from back-up, I was not able to connect/re-establish my iphoto library, or re-establish my Apple mail accounts( both of which I have done countless times in the past without hassle).
I decided to run Apple's Disk utility which reports it cannot repair the new drive.
Just prior to my original posting, I had sent a copy of my posting to Micromat (TechTool Pro) asking for their opinion/advice.
Their response was: The SMART routines are built into the hard drive by the drive manufacturer. They are proprietary and different for each drive manufacturer. TechTool Pro just reads the status of the built-in SMART parameters and reports their status. Basically, a threshold exceeded indicates that the drive has exceeded what the manufacturer thinks are proper operating parameters for it and it may be getting close to failing. For an interpretation of the seriousness of a specific attribute failure you would need to contact the drive manufacturer. A failure is a warning to be sure to keep good backups and consider replacing the drive. If you get a SMART failure on a drive that is under warranty, the drive manufacturer will typically replace the drive.
Following are two links that might be of interest:
http://www.ariolic.com/activesmart/docs/glossary.html
http://www.ariolic.com/activesmart/docs/smart-attribute-meaning.html
I also took your (Looby) advice and called Seagate. (I also visited their web site, which recommends replacement of their hard drive under these circumstances!)
Within a couple of minutes, the tech person agreed that this is a serious concern and I should replace the drive.
Regarding Wiil's post, Apple's Disk utility says: smart status verified.
The SmartReporter utility reports the smart status is OK.
The SmartUtility application says:smart status failed. ID: #190 Unknown attribute.
For all other posters, this was not a New Egg purchase, which was not relevant to my post. Thank you just the same.
I've left a message for the Apple-approved store and will ask for another drive, and that, if possible, it be tested before I bring my iMac in to reduce the inconvenience.
I'm also wondering if I should switch to a 500 GB hard drive, although that would defeat the purpose of buying the larger drive for all the video I work with ( I have another 2 Terabytes storage with external drives).
Any further comments welcome - and thank you all again for taking the time!

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