When we originally wrote DiskCheckup, we thought that it might be a useful feature to warn users when an attribute fell to within a certain limit close to the threshold (within 10%, I think). We called this a WARNING. The idea was that a warning would alert users to imminent failure before an actual fail condition was detected.
However, due to the recent amount of support mail concerning warnings, and the huge variety of drives and attribute thresholds, we believe that the feature is most likely misleading and we will be removing it in the next version, which will be available from the PassMark website within the next few days.
I agree that the a threshold value of 97 seems strange, but many thresholds we've seen in testing are not 'rounded' numbers. This is the threshold value that the drive manufacturer has set. SMART attributes and thresholds represent a normalised set of values based on reliability metrics which vary from manufacturer to manufacturer and drive to drive. Though these values give the end user an approximation of drive reliablility, their full meaning is best understood by the manufacturers.
As to whether your hard drive is on the way out, it is difficult to say. The 'Spin Retry Count' attribute is certainly dangerously close to the threshold, however, it may have been sitting at this level for some time now. I would suggest monitoring this attribute over the next few weeks to see if you notice a decline. If the attribute does indeed fall below the threshold, then it is time to start worrying.