How do hard disk repair programs work?

Background:
Sometimes a hard disk will develop a fault commonly known as a bad sector. Basically, this is a part of the disk that has become unreadable and the data in that sector is generally inaccessible. Bad sectors on a hard disk can have various effects such as

• making the computer run slowly
• preventing access to certain files while other files remain OK
• preventing access to the entire disk

Bad Sector ”Repair” Programs:
These are pieces of software that typically overwrite areas of the disk that contain bad sectors. They work on the theory that overwriting the bad sectors with new data (usually zeroes) makes the sector more readable by the computer. Unfortunately if the files you want to retrieve contain a bad sector then running such a program will modify the original file and in some cases, if the damage is severe, will render the file inaccessible.

How they work:
By reverse engineering a typical bad sector repair program Data Clinic have constructed a flow chart (partially reproduced here) to explain how one of these types of program works: