Yes. You say your hard drive IS going bad? So get a new drive. Install it as C or primary master with the OS on it, and connect the old drive as D or primary slave. If the old drive can be read by the new operating system you may be able to save the files to the new drive
search here is great been mentioned a few times
one more won't hurt
get a cloning utility like seagate disk wizard (FREE)
put new drive in as slave
follow directions exactly
bobs yer uncles
this only works if original drive still functions
there are exceptions to type of drives as well if replace drive is a diff controller ide versus sata you may not be able to boot load the sata controllers in xp first before clone that may work
Most probably it can be done via copy and paste as mentioned in the post above however Windows XP installation will not work along with registry settings and other applications.
I use an external 400 GBs hardisk to backup everything daily just in case however this includes my documents and other partitions which do not contain applications which use installation. Most applications will not work using a simple copy and paste due to many shared files and settings.
However there are some software which claim they can do it such as http://www.drive-image.com/ however i have never tested it. Its 15-Day Trial will be enough for you if it works. Give it a try.