I would suggest that he start from scratch - boot with a system floppy, fdisk, delete all partitions, reboot, fdisk, create new partition(s), reboot, and format C:
If there truly are bad sectors, they will be reported on the summary screen at the completion of the format. If it comes up clean, install the operating system and press on.
My 486/100 board had a bios that was good up to 2 gigs. If it reports the 1.1 gig drive correctly and indicates it's in LBA mode, you are in good shape and do not require an overlay.
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