Well, I have a Samsung 40 GB PATA HDD( I know its long time I upgraded . but i terribly need to recover this HDD). I think i disconnected this HDD before I turned off the power supply. Ever since I get an error during post :

Detecting Primary master ...SP0411N
Detecting primary slave...

etc etc..
and then :
Primary Master Disk failed.

I think it should be a ESD problem since i had not disconnected the power supply before removing this drive. But then, when I boot using a Ubuntu live CD, I can see that all files are intact. I tried this drive on another comp and the result was same. I ran Sea Tools for dos on this drive and the drive passed both the short test and the long test.

What do you suggest I do ?

In case I manage to create a image of this disk and load the image on to another HDD, do you think i will be able to boot into it ?

What OS?
If XP, try recovery console. Fixboot may solve your problem.
In any case, I'd copy those files before doing anything else.
I don't think this is a hardware problem, as you can see the files and it passes the Seatoools test.
I don't think an image would help.

Win XP.
I am able to access the drive using ERD commander 2007.
But since the error is occurring during POST, i was wondering if it could possibly be a hardware problem...

try booting into the bios and see if it detects the hard drive ,or if you can auto detect it [depends on age of bios ] chances of booting into it on another computer are slim unless you do a repair install after you install it in the other computer