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What is a physical failure?
"A physical failure can result from a variety of causes. There are two types of physical hard drive failures; mechanical and electronic. Mechanical failures are normally the result of a failure of the spindle motor, read-write heads, or platter surface conditions."

What is a logical failure?
Disk drive logical failures are usually a result of file-system corruption. It can be due to a virus infection, accidental deletion of system critical files or registry components, and in many cases electro-static discharge. With most logical failures, the drive is still recognized by the BIOS, but it will not boot. With these failures, data should still be intact on the drive, even though it appears to be inaccessible.