S.M.A.R.T has many pieces of data such as "current, worst, threshold, and data" (hdtune). Make sure your looking at the "data" column if your trying to get an idea of the number of reallocations.
After making sure that your looking at the correct piece of information, you can consider this:
According to google's hard drive study:
We find, for example, that after their
first scan error, drives are 39 times
more likely to fail within 60 days
than drives with no such errors. First
errors in re- allocations, offline
reallocations, and probational counts
are also strongly correlated to higher
failure probabil- ities. Despite those
strong correlations, we find that
failure prediction models based on
SMART parameters alone are likely to
be severely limited in their
prediction accuracy, given that a
large fraction of our failed drives
have shown no SMART error signals
So if you do actually have reallocated sectors, consider yourself lucky that the hard drive is showing you some sign of failure. Backup all your information and get a new hard drive. Hard drives nearing the end of their life can have many different symptoms. Slowness, and data corruption is generally what happens. From a user perspective, it could be that programs stop working/goes slow or files get corrupted or windows stops booting all together.
Whether reallocated sectors directly cause slowness is not clear. I would think that based on Google's conclusion, having reallocated sectors makes it likely that there are also other issues with the drive that are not recorded by S.M.A.R.T that could cause slowness.