yep; it's quite clever about how it deals with broken sectors too; starts jumping over them in increasingly large amounts, and goes back later (in multi-pass) to get the missing bits.
There is also a related technique used for RAID rebuilding - SCT Error Recovery Control [0] (Western Digital's name is Time-Limited Error Recovery). The main idea is to limit the maximum time allowed during a hard drive's attempt to recover from a read/write error. Without such a limitation, when the hard drive encounters a failure, it may try rereading and remapping a bad sector and becomes temporarily unresponsive, making the RAID controller to believe that the entire hard drive has failed, and potentially put more strain on the existing disk in an unnecessary full rebuild.
