IMHO, I'd first be suspect you've got malware on your laptop. Send me a PM or screen shot with the warning message. But I sure the heck wouldn't click the "backup" button until I verified the alert was genuine windows. A quick Google search of the exact message is usually all it takes.
Next, if the error is real, your best bet is to clone the drive. You want to go get a new laptop hard drive (buy the bare drive so you know the speed/capacity/warranty and make sure it'll work in your laptop) and a USB enclosure. Go home, put the drive in the enclosure and connect to your laptop. Then you want to clone the whole hard drive over to the new one. I'm pretty sure WD drives still include the utility you need so it's just point and click. Otherwise download.com should be able to provide you a source for a freeware disk clone utility (read the reviews to make sure you don't pick someone's junk.)
Next, swap out the drive in the USB enclosure for the drive in your laptop. Youtube 99% of the time has a video on how to do this for any laptop out there. If you need help, tell me the model# of your laptop. It's usually VERY easy.
But I'll bet the error is fake / malware.
Originally Posted by Luv4Fun
Thanks for EVERYONE's suggestions. Bought a new drive and am waiting on delivery of drive enclosure. I am backed up with Carbonite for all critical data so if I have a failure prior to the swap it's not the best of things, but not a huge pain in the ass.