When a hard drive begins to fail bad sectors  develop.

This can happen over time or from other factors like media damage or a light drop/bang.  Bad sectors are physical trouble areas on the surface of the platters.

Special equipment is needed to work around or read these bad sectors.

Software cannot perform this task properly and can cause more media damage.  If the bad sectors reside on areas of the platters that user data resides and they are not read this will result in corrupted data.  The recovery must never be done directly from the failing drive since this can damage it even further creating more bad sectors or causing a head crash.

If you are experiencing I/O errors, blue screens of death, or your computer is freezing and crashing this could be a good indicator of bad sectors developing.

This is the most common type of recovery performed.