Actually, I can answer you without knowing the model, because it's fairly common to the Acer Aspire in general. The error you are receiving technically means that there is a drive failure, but the error is erroneous. The problem is, you can try to do the recovery until you're blue in the face, or until the cows come home. You know, until the end of time, and you will still get that error. What you have to do to get rid of the error is to delete any existing partitions on the drive. Just be aware that when you do this, you are deleting the Acer recovery partition as well. But if you have the recovery discs, you should be in good shape.
Now to to delete the partitions is pretty simple. Download the ISO image at the page below and boot to it. It has a bunch of utilities on it that will be available after you boot. You can simply type fdisk and use that to delete the partitions.
Then boot again from the restore discs and you should be all set.