When doing a fresh install of ubuntu 9.04, does a reported error of a hd sector error mean that Ubuntu encountered a faulty sector on the hard drive?

Not necessarily.
Sometimes sectors near the beginning of a drive where the sectors fly past the read/write heads at the fastest speed require more than one pass to get it right. Magnetic hard drives evolve by packing things tighter and smaller to get more areal density, (more data storage space), as a result the rate of errors increase. Hard drive firmware uses error correction technology which can vary between manufacturers and it is possible the operating system recognized the same and reported. Normally error correction at the drive level happens silently.
There is a commercial product called SpinRite that can scan a partition or drive sector for sector and re-map bad sectors. Look in synaptic, there should be a similar tool called "recoverdm". SpinRite is typically used in dos mode from a floppy or CD, not sure how the open source version works.

The maker...

Most HDD manufacturers have a diagnostic utility that will check the quality of their devices, Seatools for Seagate, HUTIL for Samsung, etc. Go to the support site for your make of drive and see if you can download one for your HDD.

I've had a faulty hard drive before, and it took me over a month to figure it out (**head-desks**)

For me, the aforementioned seatools gave me a clue on my seagate hard drive when it couldn't return any information. My install crashed not on partitioning, but when it tried adding data and mounting it - bad sectors

Good luck though!