Try a linux livecd.
I've often had times when windows had an error reading it, but linux had no problem.
e.g. ubuntu
http://www.ubuntu.com/desktop/get-ubuntu/download
If you've never used one, you just burn it to CD or usb drive and pop it in during boot.
You can run ubuntu without modifying your hard drive, letting you do all sorts of diagnostics or rescue files before a reinstall/reimage of windows.
You can also install a virus scanner for windows files to reduce the chance you're copying a virus to your 'safe' file folder.
I'm glad Larry mentioned the removal of drive0 before installing windows on drive1.
As I just mentioned in another post (though it's far more suited here

)
Win7 has a funny habit of putting its boot info on drive0 (first drive connected) regardless of where it's installed.
So if you installed win7 on the new drive with the old one connected as first device, win7 would work fine on drive 2. But the second you removed or wiped drive1, win7 would fail to boot even though the files on that drive have not been touched.
It's best to install windows with only one drive connected, and then once things are set up, connect the others.