While Apple's bundled Disk Utility application reports a hard drive's S.M.A.R.T. status, the information might not be correct.
If you care about the information stored on a hard drive that is connected to an internal bus of your Mac, you should consider using other applications than Apple's Disk Utility to monitor that drive's health.
As can be seen in the following screen shot an HDD riddled with bad blocks is still reported as having it's S.M.A.R.T. status verified.
Here's a screenshot showing the difference between Disk Utility and SMART Utility at displaying the S.M.A.R.T. parameters.
[crarko adds: S.M.A.R.T. in general has not been incredibly successful at forecasting drive failure. Here's the report from a study Google conducted on predicting drive failures and the conclusion is that some SMART parameters are more useful than others, but "Given the lack of occurrence of predictive SMART signals on a large fraction of failed drives, it is unlikely that an accurate predictive failure model can be built based on these signals alone."
There's still no better defense against drive failure than known good backups. RAID 6 is nice too, but not found on too many desktops.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20100928143902257