jasglover,
I cant test dead computers that won't even begin to POST, nothing can, at least for less money than a small car. I'm not sure how to answer the "ok, so basically, what can this kit test?" question, all the tests are listed in the documentation.
Applying deductive reasoning, the POST card tells us the voltages are correct on the PCI BUS and that it's running at the proper speed. The system doesn't even begin to post so a look at the vendors site on BIOS recovery methods may be in order. If it did start to POST but hung at a particular POST code you would start looking into what could cause that.
As far as the hard drive issue. I'm not sure how the computer told you it had bad blocks. If it was during a chkdsk the block would have been marked as bad and avoided. PC-Doctor runs physical tests on the drive as well as queries the SMART log portion of the drive. If no errors were uncovered during the PC-Doctor read sector by sector tests and the hard drive SMART logs have not been tripped the drive is OK.
PC-Doctor is a tool and like any tool it will help you fix problems.
-Fred