Mass Effect Genesis DLC Question, Lost All Game Data

After over 80 hours of my second play through of the Mass Effect 1 and 2 games before the ME3 EC release, I was nearing the end of ME 2 when the worst happened. My Xbox isn't reading the hard drive storage anymore and it wants me to reformat it...

I haven't yet tried to reformat it, still going to see if there is any way to salvage the saved games, but the possibility is very slim after reading through forums.

Anyway, my question goes to anyone in this community that have used the ME Genesis DLC where it gives you the option of choosing decisions you made in ME1 without playing through the first game again. I figured I might do this to save 40 hours or so of gameplay and restart ME2, even if it costs me precious MS Points. How detailed is the interactive choices? Is DLC content included, like saving Balak's life? I know that he appears again in ME3, and I'd like to see him stick around from my first decisions Would anything be affected if I don't play through ME1 in ME2 or 3?

... Gotta say I'm pretty down about losing all this saved data. I played it all on a friend's Xbox the first time no more than a month ago, and I just bought this (used) Xbox all for myself. Replaying Mass Effect to put a new saved game onto my system and new Xbox live account was my first goal with my new system, and I made sure to try to do EVERY. LITTLE. THING this time around. I only just subscribed to Xbox Live Gold three days ago to get ready to play ME3 multiplayer for the first time... :/ Sad I need to wait even longer for that opportunity, as I wanted to finished ME2 before anything else. I'm still not sure if my Hard drive will even work after I attempt to reformat it, but the system is still under warranty.

TL;DR: After all that ranting, somewhere in the middle, I ask for advice about buying the DLC Mass Effect Genesis which might allow me to make choices in ME1 without playing the first game over. Anyone do this before? Anything that you miss out if you use it, that affects ME2 or 3?