You have few options to choose from when recovering hard disk.
1) use some known tools like testdisk (http://www.cgsecurity.org/wiki/TestDisk_Download)
2) use recovery cd from microsoft.
3) use chkdsk to recover data. (user the appropriate flags to do so (usually /f  and/or /x and/or  /r. http://www.microsoft.com/resources/documentation/windows/xp/all/proddocs/en-us/chkdsk.mspx?mfr=true
4) mount the drive in linux and run ( dd if=/dev/$yourharddrive$ of=$new place$ )
remember the new drive should have enough space to hold the data.

As for password recovery.
1) Start your computer normally.
2) Press Ctrl+Alt+Del to login as Administrator
3) If you have password for administrator use it to login.
OR
login using any account with Administrative privileges.
4) open Command by typing cmd in run window. (Start => run => type "cmd" and enter).
5) In command prompt type ==> net user
6) If you see the user name that you need to change password for, type => net user $username$ *
   ***** Remember to replace $username$ with the original username that you need to change password for.
7) Command prompt will ask you for the new password, type the new password twice and you are all set.
8) Viola, you can login  to your  computer using the  username and new password that you just changed.