How to clone a damaged HD? Been through a bit of the suggested answers, nothing has been suggested that I haven't tried (unsuccesfully, as of yet), so I turn to the group for answers.

I have a 2.5" HD from an MacBook 2011-vintage. It was that computer's boot drive, and in fact will mount, and boot, a 1,1 Mac Tower that I've got it in.  It's running 10.6.8 (Snow Leopard). The drive has physical damage (bad sectors), and performs poorly to not at all during finder operations (eg, copy).  I've tried to recover the data on the drive (iPhoto/iTunes stuff, text docs, things that aren't backed up) using Data Rescue 3, to no avail so far - it sees the drive, but just hangs and becomes non-responsive.  Prosoft's suggestion is to clone the drive and recover from the clone. Sounds good, but...

I've now got the drive on another MacPro system, in an eSATA dock, and am attempting to clone it to a fresh internal drive. I tried using the Terminal command dd, as was suggested in another post here, but after an overnight run nothing seemed to be happening. Currently, I'm attempting to clone it using Disk Utility's "Restore" tab...but it seems that nothing is happening beyond the "Setup" phase. 

If specifying "dd", using the correct arguments to create nulls to fill bad sectors, makes a bit-by-bit clone...then why isn't it working?
Your best bet when hardware is failing is Data Rescue and not any tool that tries to rebuild/minimize/rewrite errors.

You will need a second drive of equal capacity and time to let the software take several passes at reading the data to get the best results. But, unless you have a budget of $300 to $3000 and want to send the drive off for professional help - you can't do better than Data Rescue in my estimation and experience.

Data Rescue has professional support and many bells and settings to tell it to really try to access the data by hook or crook, so a call into them would be my next step as you indicated it's not working with your settings.