You might not have to get a new hdd because this error may be caused by several different thing try boot off a windows cd and reinstalling. if windows picks up your hdd and formats it without any problems your hdd is still working
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Power down your Compaq Presario F500 notebook computer. Remove the unit's internal battery from its housing compartment. Use a screwdriver to unscrew and remove all of the screws from the
bottom panel of your Compaq Presario F500. Use your hands to lift off
the bottom panel, revealing the inside of the notebook computer. Look for the CMOS/BIOS chip: It will be located in the center of your
computer's motherboard, which is itself located in the center of the
case. Remove the small battery from its housing compartment on the CMOS/BIOS
chip. Then, press and hold the "Power" button on the laptop's case for a
few seconds. This will completely discharge all electricity from the
device. Replace the CMOS/BIOS' battery. Place the bottom panel of the notebook
computer back on and screw it back into place. Place the Compaq Presario
F500's battery back into its housing compartment and press the "Power"
button to turn it on. Your CMOS/BIOS will now be completely reset. Good luck and please let me know how you get on!!!!
I would assume that your hard drive is spinning? If not your system will not boot because of a faulty or missing harddrive. Last known good config only works on the operating system and would not work during POST. Can you give a little more information please?
Check the Compaq/HP WEB site - download the latest drivers for the Windows version you are using. Sometimes the latest one does not work but the previous one will work. (I've come across this problem before and it is not confined to Compaq/HP)