Boot from your OSX install disk, and install OSX on you 2nd (good) internal hard drive. Then you can start repairs./filerecovery on the main drive.
DiskUtility Repair Disk should be your first step
TechTool Pro or DiskWarrior for directory corruption that Disk Utility can't handle. DataRescue X for scavenging files off the drive,
Do not attempt to install anything on the main drive until it has a clean bill of health.
Be prepared to buy a new IDE 120 Gb hard drive (I don;t think your machine supports drives larger than 128 Gb off the motherboard IDE connection)
O'course, your first step is to get the OSX disks, you;re kind of snookered without them. If you had upgraded your machine from borrowed disks, then now's the time to bite the bullet and purchase a retail OSX.