[UserNameGoesHere]

Do you have a bootable thumb drive? Or a thumb drive you can use? (2GB should be fine).

Put the thumb drive in, then within Ubuntu go System, Administration, Startup Disk Creator and you should be able to make the thumb drive bootable with your version of Ubuntu on that.

Boot off the thumb drive (You may have to enable booting off USB thumb drives in your BIOS or may need to set it higher in the boot order). Once in Ubuntu zero-out your hard drive, stick your Windows 7 install disk in the tray, close that, shutdown Ubuntu, remove the stick, boot 'er up and hopefully Windows 7 will be able to install now (You lose all previous data doing this though)

To zero-out your hard drive from within Ubuntu you'll need to know what device file it is, which unfortunately can vary. The Disk Utility from earlier should tell you what device it is (for example mine is /dev/sda but yours could be /dev/hda /dev/sdb etc...) The number after is the partition so /dev/sda1 would be a partition within /dev/sda.

To zero-out /dev/sda for example (and you need to replace with what it really was) you can run this from a command prompt

sudo su -
dd if=/dev/zero of=/dev/sda bs=1M

To zero-out just a single partition instead of the whole drive (for example just sda1 and not all of sda) you could do this instead but replace with the correct drive identifier and partition number.

sudo su -
dd if=/dev/zero of=/dev/sda1 bs=1M

-edit-
oh and it will appear to be doing nothing but it's zeroing your drive. It just can take a long time. Hours even. Let it do its thing and trust that it is doing its thing. Unfortunately you get no confirmation until it's done -- and only confirmation is you get to type text in your command prompt again (yay). So it'll seem like it is "hung" but it isn't.

-edit-
back up all data (for example burn to DVDs) before zeroing out your drive though or you potentially lose it forever. Zeroing out the drive is to give Windows 7 a "clean" hard drive to install to. If repair options aren't working, sometimes a full reinstall is the only answer.

-edit-
oh yeah, and once you've zero'd out your drive, run the S.M.A.R.T. tests on it again and see if that one sector got successfully remapped (it should). If not, then I don't know what to tell ya. And you may want to just stick another drive in there and reinstall to it instead.