You MUST make sure you can see the hidden files and system folder from your PC when backing up. If you cannot see the SYSTEM folder from of Audya hard drive you MUST NOT format the hard drive. It is vital you make these visible from windows control panel (win 7) or explorer -> tools (XP)

Also do not copy the entire hard drive in one go as you will probably get a windows "cyclic redundancy error", instead copy one folder at a time to your computer.

Once you have done that Run Disk Check from 'My Computer' check for bad sectors too.

formatting is a last resort.