I am assuming it has something to do with the Hard drive. My grandmother had an old compaq which stopped working on her and the best buy tech's told her she had a bad sector. I figured I could throw an old HD in it and reinstall xp and she would be fine. come to find out it looks like a bad psu since it won't power up at all. When I plug it in the power led comes on but when i hit the power button nothing. no fans, no hd activity no post beeps nothing. I don't even have a psu with the correct connector to try it out so I told her it was scrap. I  don't know how they figure it has a bad hard drive if it won't even power up. that is what bad sectors means right?

DFT (powered by Hitachi I believe) has a sector repair built into it....Also I think Seatools may have something similiar but I always use DFT.

Generally (don't ask me why) HDD mfgs build HDDs with spare sectors for such a problem so a sector repair will actually move data and subsequently disable that sector(s) on the drive.....it is however usually a sign that you probably will not get more than a year more out of the drive so BACKUP DATA!!!! :)

EDIT: If your grandfather brought it in to BBY we generally would generally check it in for a diagnostic -- if it wasn't powering on we throw in a test PSU and continue from there....chances are this may be what happened?

 Well they mentioned nothing about a bad psu but when I hit the power button nothing happens except the power led stays lit so I know it's getting power but nothing is happening, no fans no activity what so ever. I guess it could be the mb too but wouldn't I hear the hd spin up atleast even if it was the MB?

 I doubt they determined bad sectors if it wouldnt boot.Need to determine if fans coming on in PS and on MB! If your getting spindle rotation in HD then in my thinking the MB switches power on to HD by way of HD connector from PS. You could test PS by disconnecting from MB apply a jumper to pin14  or green wire to black ground ! Check for fan rotation if there 2 poss scenarios poss MB and or Cpu or weak PS! Thats just my 2 cents! My bets on the MB!!

 Well it's either MB or PSU. Either way, it's not worth fixing. they already got another computer. They just wanted to know if this antique was fixable and worth saving. Being that it's an old compaq if either component is bad(MB or PSU) than it's not worth fixing. A swap of the HD would have been an easy an inexpensive fix which I was willing to do. I already told my grandmother it was a goner so it's going in the trash. thanks for all your help anyways guys.