Not to instill fear, but it sounds like you hard drive failed. That's the classic sign.
A good chunk of hard drives on the first generation macbooks are/were defective. Mine did the same thing to me when it went out. Except I was on myspace. It froze, I restarted, and then apple logo and gears and nothing else. When the hard drive went out in my powerbook, same thing.
I'm certain your hard drive failed. But hey, if you have the install discs, slip them in and run the hardware test, or try an archive and install.