I thought that the SMS units rip the music in three formats. As the hard drive fills up it starts to automatically delete certain formats of music that is not listen to that much. It won't remove the music but will remove first the .wav file than the .flac file and as you keep filling up the unit all you will have left is the mp3.
I don't know whether to bump this old thread or start my own, but I have the same question. The hard drive is failing and I won't be able to get warranty repair from Russound due to it being an Ebay purchase.
I don't think you'll be able to upgrade to a larger disk, but it's possible to save what you have via a s/w copy and install a new drive. However, Paul's h/w based solution to copy the data is a better idea!
You should try talking to Russound anyway because a good percentage of the original drives shipped in the early SMS3 160 are questionable (being replaced with WD drives). I would say getting service depends on who you talk with and what you say! Russound is very customer centric, but they're also sensitive to the channel from which a customer makes their purchase.