Hi Raj,
Hopefully you have another true backup for your data, if not and you can afford another hd or other backup solution, use it to backup your data. Other options, shut down the 320 and pull the drive which is showing up as "failing", install it in another computer either directly or via USB. Download and run the drive manufacturers drive diagnostic tool and run it for your suspected drive, actually do the download first and then connect the drive. You should probably run the "extended" version of the diagnostic which will probably take several hours. This should tell you what kind of condition the hd is in for certain, if you can even get the drive recognized. The short Smart drive test has been known to give erroneous results at times, especially on a "dying" but not totally "dead" drive. Good luck
PS. Check out the sticky on why Raid 1 is not a backup.