You gotta be careful running a LLF because if you let it automaticly mark off what it thinks are errors, those sectors get permanently marked off as bad even if they weren't.
First thing I do with a new to me HD, is LLF and manually approve any repairs. Takes some patience sitting in front of the computer to respond to any hickups, but you know it's all good when you're done.
I also once had an incorrect CHS selected in my bios, and eventhough 98 installed ok, I kept getting errors using scandisk and it wanted to do a low level scan on auto fix. I said no. After I fixed the bios entry, it still errored out until I just bit the bullet and reinstalled 98. Re-ran scandisk and no bad sectors this time. It would have trashed the HD if I hadn't figured out the root problem and just let windows have it's way.
Either one of these scenarios can damage you HD if you let M$ run the show on its own.