Macbook hard drive problems -- any advices?

Hi everyone. I am new to Mac world. Recently I have bought an early 2008 Macbook version on craiglist to "taste" Macbook and OS X and swith if I liked. But a week later there started macbook issues. Firstly, it started freezing once a day. Later it started getting worse. Now I cannot boot the macbook. I can hear the boot tone and that's it. After that one question mark is appearing. I tried to reinstall the OS X LION. When I started the install everything is going right until I have to choose a hard drive. I cannot see the hard drive and the list is empty. Not being able to install the OS only thing I can do is to start the macbook and use it like 10 mins and that's it. It is freezing. And cannot boot it at all. I was wondering if the hard drive messed up or any hardware issue. Has anyone encountered the same issue? What would you advice to do? Do I have to install a new hard drive? Any advice will be appreciated.

It sounds like the hard drive went south. Swapping out a hard drive in a 2008 MacBook is an easy do it yourself project. A new hard drive must be SATA, 2.5" wide and 9.5 MM thick. See the install instructions at iFixit: The free repair manual.