I hope you have a backup. What kinds of errors does it report? Can it repair them?
You can reinstall OS X fine without erasing any files, but it might not fix your problem if it goes deeper than that (maybe something wrong with your partitions, or even a physical hard drive error?).
Thanks for the reply. When I did the "verify disk" option I got the following on my screen:
Verifying volume "Macintosh HD"
Checking HFS Plus Volume
Checking Extents Overflow file
Checking Catalog file
Invalid node structure
The volume Macintosh HD needs to be repaired
Error: The underlying task reported failure on exit
1 HFS volume checked
Volume needs repair
If I click on repair disk I get this:
Verifying volume "Macintosh HD"
Checking HFS Plus Volume
Checking Extents Overflow file
Checking Catalog file
Invalid node structure
The volume Macintosh HD needs to be repaired
Error: The underlying task reported failure on exit
1 HFS volume checked
1 volume could not be repaired because of an error
So where does this leave me? Is my HD bad (I just got the iMac 2 days ago). Should I reformat and hope this fixes everything? Also what could be causing this? Both OSX and XP seem to be running fine. I've played a few games in XP and the only thing I noticed was that disk utility and boot camp assistant won't open. I'm a converter so I still have all my original files backed up yet. Thanks!
edit: I also noticed that my Macintosh HD partition is #2, and my Windows XP partition is #3. I only have (and only see in Disk Utility) 2 partitions.