It looks like that laptop took a standard ATA / IDE notebook 2.5" laptop hard drive. Gateway Support - Components list for 1008851
Yours might have come with a 60GB but you can buy a 20, 30, or whatever size you want to get it going. If you need lots of storage you can get a bigger one (just don't get one of the physically larger 12mm size drives - stick with 9mm). You can find plenty of these on eBay. Just pull your drive out before you buy one to verify the connection and size, etc.
If it was just the SMART error (meaning the HDD was dying) - you can replace it and get this going pretty cheap and easily. It will be fine for surfing the web and checking email, etc.