My girlfriend was in this exact situation recently and Tom helped us rescue some data. We didn't get everything, but we got enough. Our main tool was DiskWarrior. Well, and Tom's Mac expertise.

The recovered files didn't all have the original file names, but she was able to sort everything out and find the critical stuff even if it meant sifting through hundreds of files with random numbers for the file names.

When you order DiskWarrior, one of the options is to get the thing mailed to you on a USB stick, so that's one way to get it working even if the system won't boot the hard drive.

I highly recommend getting a USB external disk drive. Having one on hand helped in the recovery process. I seem to recall that we installed the OS onto it and booted from it while we were trying to recover the data from the bad disk that was still in the computer. Once we recovered the data, we removed the bad disk, installed a new fresh/good replacement disk, and then the external drive is now her Time Machine backup drive which hopefully she's using religiously now.