Imaging and replacing a drive with bad sectors

I am using True Image Home 2010

I have a question re an upcoming restore situation, and I would like some advice. I am an advanced user, and this is my 4th version of TI, and it has served me well through many drive failures and replacements.

The current problem is with my Windows 7 Pro 64 bit system. The system C drive is an OCX SSD 120 GB solid state drive. I generally create a new full image weekly, and store that image on one of 4 drives - my internal E, and F drive, and external M and N drives. All these drives are Sata or eSata

Several weeks ago, my system started behaving strangely, and I experienced problems with several programs, and also extended system shut down times. Suddenly on one shutdown, I got a blue screen crash, and the usual Windows message that the shutdown had occurred to protect my system. Then Windows said it wanted to do a full CHKDSK of my C drive, which I approved.

Along the way I got lots of lines stating that there were disk problems, probably lots of bad sectors. It wasn't clear whether Windows could "fix" those problems, so I rebooted, and things seemed better. But another blue screen crash occurred shortly, and when I checked the results of the junk files, using the program Ccleaner there were a number of large memory dumps.

It was my general policy to run Ccleaner daily to get rid of all the temporary files et al. But I decided to not do that then. I immediately contacted OCZ, and made arrangements for a replacement unit, which will be coming a few days from now.

Leaving all the temporary files in place, served a good purpose. Apparently, those files were occupying most/all of the bad sectors, so the machine had returned to normal operation, with no crashes, and no other problems.

I do have full weekly images from the past going back quite a while.

MY QUESTIONS ARE
When I have the replacement drive in my hands, and formatted, should I first create a new image of the system drive containing the problem drive, and then use that to restore everything to the new drive? If so, should I delete all the temp files, dumps, etc., before creating that image? If I do not, I assume that TI will probably include all the junk/temps, when it creates the new image. Will it also include bad sectors in the new image?

Or should I use an image from several weeks back, when the sector problems were probably present, but had not yet caused the crashes.

I'm not sure how the bad sectors on the problem drive will affect creating and restoring such an image. I do know from the past, that when I had a drive with a lots of bad sectors, TI actually froze during the creation of an image, and would not create the image.

Being able to use a new/current image is desirable, as older images will not be as up to date for everything. I do have all my data and files backed up to archive locations. But new programs and updates would not of course be present in older images.

One further question - can True Image format a newly installed drive, prior to restoring an image to it? Historically I've always done formatting on another computer, prior to installing it in its new home.