The hard drive controllers do it themselves, just like flash controllers. The OS is not involved. (The OS actually has its own list of bad blocks and a remapping scheme, but it doesn’t do ECC recovery when it finds a bad block. The whole thing is really an anachronism. If the OS ever becomes aware of a bad block, it means there were so many bad blocks that the controller became overwhelmed and the whole drive should be chucked.)
The phenomenon differs from SSD decay in the details (it’s not dependent on writes and the rate is different), but otherwise is a direct analogy.
Applications and windows start up about 2.5x faster than on a Raptor. A Raptor is a 10,000 RPM drive and is about 1.5x faster than a normal 7,200 hard drive. 7,200 desktop hard drives are some factor again faster than the typical low-RPM drives used in laptops. So yeah, it’s a big difference, especially for laptops. Putting programs and OS on an SSD and downloads on an HD is definitely the way to go. You can do this affordable already, since a $100 64GB drive is all you really need for Windows.
We picked up a 32G SSD for my laptop to test it. My laptop went from booting and finishing all antivirus, TSR’s, etc. in 2:45 to 0:38. 38 seconds is a crapload faster.