that's right.
there's a series of different tests that can be performed on the drives. most notably, there's S.M.A.R.T. which is an embedded diagnostic application in the drive that is intended to report if there's any problems with the basic mechanics of the drive. depending on the computer BIOS, this is something that can pop up as a warning that the drive may be in danger of failing, which means you need to back it up immediately. in most everyday applications, S.M.A.R.T. is useless though. the "Quick Test" bases most of its data on this, if the drive reports any operating threshold errors, this will come up here.
then there's an Extended Test. this goes beyond the mechanical testing and goes into surface testing, the surface of the disk platters. this will go over every cluster of the disk and if any report as "bad" then the drive itself will make a note that there are bad clusters and avoid allowing write operations to those. bad clusters can result in files being unreadable. bad sectors on the other hand mean that the drive is cashed, there's significant damage to the disk media and if there's only minor problems with the drive now, they will escalate into much worse problems until the entire drive is finished.
I'm assuming you're asking about video game hard drives. the only way to do file system checking then is within the game's test mode. the games will have basic testing like I outlined above, but as for how accurate they are, I don't know, and video game boards seem to have a very limited data rate (what appears to be 16 mb/sec) so you could probably do the same test faster and more accurately in a PC. unless of course the drives are old enough that they don't have at least ATA/33 capability, then it won't be any faster.
if you have any further questions don't hesitate to ask.